diff --git a/.release-please-manifest.json b/.release-please-manifest.json
index 9dc6cef..3cf104e 100644
--- a/.release-please-manifest.json
+++ b/.release-please-manifest.json
@@ -1,3 +1,3 @@
 {
-  ".": "3.4.0"
+  ".": "3.5.0"
 }
diff --git a/CHANGELOG.md b/CHANGELOG.md
index ad4e0da..c346744 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,14 @@
 # Changelog
 
+## [3.5.0](https://github.com/open-feature/flagd-testbed/compare/v3.4.0...v3.5.0) (2026-04-01)
+
+
+### ✨ New Features
+
+* add [@env-var](https://github.com/env-var) tag to env-var config scenarios ([#359](https://github.com/open-feature/flagd-testbed/issues/359)) ([7fb6fa1](https://github.com/open-feature/flagd-testbed/commit/7fb6fa1139ed1788ecf9d97c4a75a7289c1a7571))
+* **operators:** add error return scenarios for custom operator null fallback ([#342](https://github.com/open-feature/flagd-testbed/issues/342)) ([eb3fa72](https://github.com/open-feature/flagd-testbed/commit/eb3fa72025612e7b10d83760cf29e43568520466))
+* update flagd ([#360](https://github.com/open-feature/flagd-testbed/issues/360)) ([3ff7923](https://github.com/open-feature/flagd-testbed/commit/3ff792319db711e2c6234c880d684e635683f9f2))
+
 ## [3.4.0](https://github.com/open-feature/flagd-testbed/compare/v3.3.0...v3.4.0) (2026-03-30)
 
 
diff --git a/docker-compose.yaml b/docker-compose.yaml
index 2e395f4..fb91e07 100644
--- a/docker-compose.yaml
+++ b/docker-compose.yaml
@@ -2,7 +2,7 @@ version: '3.8'
 
 services:
   flagd:
-    image: ${IMAGE:-ghcr.io/open-feature/flagd-testbed}:${VERSION:-v3.4.0} # x-release-please-version
+    image: ${IMAGE:-ghcr.io/open-feature/flagd-testbed}:${VERSION:-v3.5.0} # x-release-please-version
     ports:
       - 8013
       - 8014
diff --git a/version.txt b/version.txt
index 1809198..1545d96 100644
--- a/version.txt
+++ b/version.txt
@@ -1 +1 @@
-3.4.0
+3.5.0