diff --git a/ethereum/datastructures/src/main/java/tech/pegasys/artemis/datastructures/state/BeaconState.java b/ethereum/datastructures/src/main/java/tech/pegasys/artemis/datastructures/state/BeaconState.java
index ba124d857e4..fff8b2fc1aa 100644
--- a/ethereum/datastructures/src/main/java/tech/pegasys/artemis/datastructures/state/BeaconState.java
+++ b/ethereum/datastructures/src/main/java/tech/pegasys/artemis/datastructures/state/BeaconState.java
@@ -65,6 +65,8 @@ public class BeaconState {
   private Eth1Data latest_eth1_data;
   private List<Eth1DataVote> eth1_data_votes;
 
+  private UnsignedLong deposit_index;
+
   public static BeaconState deepCopy(BeaconState state) {
     Gson gson =
         new GsonBuilder()
@@ -111,7 +113,8 @@ public BeaconState(
 
       // Ethereum 1.0 chain data
       Eth1Data latest_eth1_data,
-      List<Eth1DataVote> eth1_data_votes) {
+      List<Eth1DataVote> eth1_data_votes,
+      UnsignedLong deposit_index) {
     this.slot = slot;
     this.genesis_time = genesis_time;
     this.fork = fork;
@@ -142,6 +145,8 @@ public BeaconState(
 
     this.latest_eth1_data = latest_eth1_data;
     this.eth1_data_votes = eth1_data_votes;
+
+    this.deposit_index = deposit_index;
   }
 
   public static BeaconState fromBytes(Bytes bytes) {
@@ -196,7 +201,8 @@ public static BeaconState fromBytes(Bytes bytes) {
                 Eth1Data.fromBytes(reader.readBytes()),
                 reader.readBytesList().stream()
                     .map(Eth1DataVote::fromBytes)
-                    .collect(Collectors.toList())));
+                    .collect(Collectors.toList()),
+                UnsignedLong.fromLongBits(reader.readUInt64())));
   }
 
   public Bytes toBytes() {
@@ -250,6 +256,7 @@ public Bytes toBytes() {
           // Ethereum 1.0 chain data
           writer.writeBytes(latest_eth1_data.toBytes());
           writer.writeBytesList(eth1_data_votesBytes);
+          writer.writeUInt64(deposit_index.longValue());
         });
   }
 
@@ -280,7 +287,8 @@ public int hashCode() {
         latest_attestations,
         batched_block_roots,
         latest_eth1_data,
-        eth1_data_votes);
+        eth1_data_votes,
+        deposit_index);
   }
 
   @Override
@@ -325,7 +333,8 @@ public boolean equals(Object obj) {
         && Objects.equals(this.getLatest_attestations(), other.getLatest_attestations())
         && Objects.equals(this.getBatched_block_roots(), other.getBatched_block_roots())
         && Objects.equals(this.getLatest_eth1_data(), other.getLatest_eth1_data())
-        && Objects.equals(this.getEth1_data_votes(), other.getEth1_data_votes());
+        && Objects.equals(this.getEth1_data_votes(), other.getEth1_data_votes())
+        && Objects.equals(this.getDeposit_index(), other.getDeposit_index());
   }
 
   /** ******************* * GETTERS & SETTERS * * ******************* */
@@ -529,6 +538,14 @@ public void setEth1_data_votes(List<Eth1DataVote> eth1_data_votes) {
     this.eth1_data_votes = eth1_data_votes;
   }
 
+  public UnsignedLong getDeposit_index() {
+    return deposit_index;
+  }
+
+  public void setDeposit_index(UnsignedLong deposit_index) {
+    this.deposit_index = deposit_index;
+  }
+
   public void incrementSlot() {
     this.slot = slot.plus(UnsignedLong.ONE);
   }
diff --git a/ethereum/datastructures/src/main/java/tech/pegasys/artemis/datastructures/util/BeaconStateUtil.java b/ethereum/datastructures/src/main/java/tech/pegasys/artemis/datastructures/util/BeaconStateUtil.java
index a006d6e6b64..642b84d4e6c 100644
--- a/ethereum/datastructures/src/main/java/tech/pegasys/artemis/datastructures/util/BeaconStateUtil.java
+++ b/ethereum/datastructures/src/main/java/tech/pegasys/artemis/datastructures/util/BeaconStateUtil.java
@@ -140,7 +140,8 @@ public static BeaconState get_initial_beacon_state(
 
             // Ethereum 1.0 chain data
             latest_eth1_data,
-            new ArrayList<>());
+            new ArrayList<>(),
+            UnsignedLong.valueOf(initial_validator_deposits.size()));
 
     // Process initial deposits
     for (Deposit validator_deposit : initial_validator_deposits) {
@@ -850,8 +851,9 @@ public static void process_deposit(
     List<UnsignedLong> validatorBalances = state.getValidator_balances();
 
     // Verify that the proof of posession is valid before processing the deposit.
-    checkArgument(
-        validate_proof_of_possession(state, pubkey, proof_of_possession, withdrawal_credentials));
+    if (!validate_proof_of_possession(state, pubkey, proof_of_possession, withdrawal_credentials)) {
+      return;
+    }
 
     // Retrieve the list of validator's public keys from the current state.
     List<BLSPublicKey> validator_pubkeys =
diff --git a/ethereum/statetransition/src/main/java/tech/pegasys/artemis/statetransition/util/BlockProcessorUtil.java b/ethereum/statetransition/src/main/java/tech/pegasys/artemis/statetransition/util/BlockProcessorUtil.java
index 6cb5388663a..1b7e6c3e94b 100644
--- a/ethereum/statetransition/src/main/java/tech/pegasys/artemis/statetransition/util/BlockProcessorUtil.java
+++ b/ethereum/statetransition/src/main/java/tech/pegasys/artemis/statetransition/util/BlockProcessorUtil.java
@@ -533,6 +533,8 @@ public static void processDeposits(BeaconState state, BeaconBlock block)
       //     the hash was placed into the Merkle tree.
       Bytes serialized_deposit_data = deposit.getDeposit_data().toBytes();
 
+      checkArgument(Objects.equals(state.getDeposit_index(), deposit.getIndex()));
+
       // - Vadliate verify_merkle_branch(hash(serialized_deposit_data), deposit.branch,
       //     DEPOSIT_CONTRACT_TREE_DEPTH, deposit.index, state.latest_eth1_data.deposit_root)
       checkArgument(
@@ -550,6 +552,8 @@ public static void processDeposits(BeaconState state, BeaconBlock block)
           deposit.getDeposit_data().getAmount(),
           deposit.getDeposit_data().getDeposit_input().getProof_of_possession(),
           deposit.getDeposit_data().getDeposit_input().getWithdrawal_credentials());
+
+      state.setDeposit_index(state.getDeposit_index().plus(UnsignedLong.ONE));
     }
   }