diff --git a/pkg/api/staking.go b/pkg/api/staking.go
index 2f957e4532a..14a824b4900 100644
--- a/pkg/api/staking.go
+++ b/pkg/api/staking.go
@@ -5,6 +5,7 @@
 package api
 
 import (
+	"context"
 	"errors"
 	"math/big"
 	"net/http"
@@ -77,6 +78,21 @@ func (s *Service) stakingDepositHandler(w http.ResponseWriter, r *http.Request)
 		jsonhttp.InternalServerError(w, "cannot stake")
 		return
 	}
+
+	// if the deposit is successful, we should update the height of the node in the staking contract
+	// this is done to make sure that the node is participating in the redistribution game with the correct height
+	// if the node has started with insufficient stake
+	go func() {
+		tx, updated, err := s.stakingContract.UpdateHeight(context.Background())
+		if err != nil {
+			logger.Error(err, "update height failed")
+			return
+		}
+		if updated {
+			logger.Warning("reserve capacity doubling updated after stake deposit. Node will be FROZEN for ~2 rounds.", "transaction", tx)
+		}
+	}()
+
 	jsonhttp.OK(w, stakeTransactionReponse{
 		TxHash: txHash.String(),
 	})
diff --git a/pkg/node/node.go b/pkg/node/node.go
index f20468df338..b828983b5de 100644
--- a/pkg/node/node.go
+++ b/pkg/node/node.go
@@ -1116,19 +1116,21 @@ func NewBee(
 				logger.Info("overlay address changed in staking contract", "transaction", tx)
 			}
 
-			// make sure that the staking contract has the up to date height
-			tx, updated, err := stakingContract.UpdateHeight(ctx)
-			if err != nil {
-				return nil, fmt.Errorf("update height in staking contract: %w", err)
-			}
-			if updated {
-				logger.Info("updated new reserve capacity doubling height in the staking contract", "transaction", tx, "new_height", o.ReserveCapacityDoubling)
-			}
-
 			// Check if the staked amount is sufficient to cover the additional neighborhoods.
 			// The staked amount must be at least 2^h * MinimumStake.
-			if o.ReserveCapacityDoubling > 0 && stake.Cmp(big.NewInt(0).Mul(big.NewInt(1<<o.ReserveCapacityDoubling), staking.MinimumStakeAmount)) < 0 {
-				logger.Warning("staked amount does not sufficiently cover the additional reserve capacity. Stake should be at least 2^h * 10 BZZ, where h is the number extra doublings.")
+			minStake := big.NewInt(0).Mul(big.NewInt(1<<o.ReserveCapacityDoubling), staking.MinimumStakeAmount)
+			if o.ReserveCapacityDoubling > 0 && stake.Cmp(minStake) < 0 {
+				logger.Warning("staked amount does not sufficiently cover the additional reserve capacity. On-chain height update will be skipped. Node will start, but storage incentives may not function for this capacity.", "missing_stake", new(big.Int).Sub(minStake, stake))
+
+			} else {
+				// make sure that the staking contract has the up to date height
+				tx, updated, err := stakingContract.UpdateHeight(ctx)
+				if err != nil {
+					return nil, fmt.Errorf("update height in staking contract: %w", err)
+				}
+				if updated {
+					logger.Info("updated new reserve capacity doubling height in the staking contract", "transaction", tx, "new_height", o.ReserveCapacityDoubling)
+				}
 			}
 		}
 	}