diff --git a/CHANGELOG.md b/CHANGELOG.md
index 1cbb65c163fe..a24cc57f3035 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -126,6 +126,7 @@ Ref: https://keepachangelog.com/en/1.0.0/
 * [\#9699](https://github.com/cosmos/cosmos-sdk/pull/9699) Add `:`, `.`, `-`, and `_` as allowed characters in the default denom regular expression.
 * (genesis) [\#9697](https://github.com/cosmos/cosmos-sdk/pull/9697) Ensure `InitGenesis` returns with non-empty validator set.
 * [\#10262](https://github.com/cosmos/cosmos-sdk/pull/10262) Remove unnecessary logging in `x/feegrant` simulation.
+* [\#10339](https://github.com/cosmos/cosmos-sdk/pull/10339) Improve performance of `removeZeroCoins` by only allocating memory when necessary
 * [\#10341](https://github.com/cosmos/cosmos-sdk/pull/10341) Move from `io/ioutil` to `io` and `os` packages.
 
 ### Bug Fixes
diff --git a/types/coin.go b/types/coin.go
index ea8557a5df57..ce222e1709f8 100644
--- a/types/coin.go
+++ b/types/coin.go
@@ -626,7 +626,18 @@ func (coins Coins) negative() Coins {
 
 // removeZeroCoins removes all zero coins from the given coin set in-place.
 func removeZeroCoins(coins Coins) Coins {
-	result := make([]Coin, 0, len(coins))
+	for i := 0; i < len(coins); i++ {
+		if coins[i].IsZero() {
+			break
+		} else if i == len(coins)-1 {
+			return coins
+		}
+	}
+
+	var result []Coin
+	if len(coins) > 0 {
+		result = make([]Coin, 0, len(coins)-1)
+	}
 
 	for _, coin := range coins {
 		if !coin.IsZero() {