diff --git a/x/wasm/internal/keeper/keeper.go b/x/wasm/internal/keeper/keeper.go
index 7fc35033ae5..6856601eaff 100644
--- a/x/wasm/internal/keeper/keeper.go
+++ b/x/wasm/internal/keeper/keeper.go
@@ -28,6 +28,13 @@ const GasMultiplier = 100
 // MaxGas for a contract is 900 million (enforced in rust)
 const MaxGas = 900_000_000
 
+// InstanceCost is how much SDK gas we charge each time we load a WASM instance.
+// Creating a new instance is costly, and this helps put a recursion limit to contracts calling contracts.
+const InstanceCost uint64 = 40_000
+
+// CompileCost is how much SDK gas we charge *per byte* for compiling WASM code.
+const CompileCost uint64 = 2
+
 // Keeper will have a reference to Wasmer with it's own data directory.
 type Keeper struct {
 	storeKey      sdk.StoreKey
@@ -73,6 +80,8 @@ func (k Keeper) Create(ctx sdk.Context, creator sdk.AccAddress, wasmCode []byte,
 	if err != nil {
 		return 0, sdkerrors.Wrap(types.ErrCreateFailed, err.Error())
 	}
+	ctx.GasMeter().ConsumeGas(CompileCost*uint64(len(wasmCode)), "Compiling WASM Bytecode")
+
 	codeHash, err := k.wasmer.Create(wasmCode)
 	if err != nil {
 		// return 0, sdkerrors.Wrap(err, "cosmwasm create")
@@ -89,6 +98,8 @@ func (k Keeper) Create(ctx sdk.Context, creator sdk.AccAddress, wasmCode []byte,
 
 // Instantiate creates an instance of a WASM contract
 func (k Keeper) Instantiate(ctx sdk.Context, codeID uint64, creator, admin sdk.AccAddress, initMsg []byte, label string, deposit sdk.Coins) (sdk.AccAddress, error) {
+	ctx.GasMeter().ConsumeGas(InstanceCost, "Loading CosmWasm module: init")
+
 	// create contract address
 	contractAddress := k.generateContractAddress(ctx, codeID)
 	existingAcct := k.accountKeeper.GetAccount(ctx, contractAddress)
@@ -159,6 +170,8 @@ func (k Keeper) Instantiate(ctx sdk.Context, codeID uint64, creator, admin sdk.A
 
 // Execute executes the contract instance
 func (k Keeper) Execute(ctx sdk.Context, contractAddress sdk.AccAddress, caller sdk.AccAddress, msg []byte, coins sdk.Coins) (*sdk.Result, error) {
+	ctx.GasMeter().ConsumeGas(InstanceCost, "Loading CosmWasm module: execute")
+
 	codeInfo, prefixStore, err := k.contractInstance(ctx, contractAddress)
 	if err != nil {
 		return nil, err
@@ -201,6 +214,8 @@ func (k Keeper) Execute(ctx sdk.Context, contractAddress sdk.AccAddress, caller
 
 // Migrate allows to upgrade a contract to a new code with data migration.
 func (k Keeper) Migrate(ctx sdk.Context, contractAddress sdk.AccAddress, caller sdk.AccAddress, newCodeID uint64, msg []byte) (*sdk.Result, error) {
+	ctx.GasMeter().ConsumeGas(InstanceCost, "Loading CosmWasm module: migrate")
+
 	contractInfo := k.GetContractInfo(ctx, contractAddress)
 	if contractInfo == nil {
 		return nil, sdkerrors.Wrap(sdkerrors.ErrInvalidRequest, "unknown contract")
@@ -267,6 +282,8 @@ func (k Keeper) UpdateContractAdmin(ctx sdk.Context, contractAddress sdk.AccAddr
 
 // QuerySmart queries the smart contract itself.
 func (k Keeper) QuerySmart(ctx sdk.Context, contractAddr sdk.AccAddress, req []byte) ([]byte, error) {
+	ctx.GasMeter().ConsumeGas(InstanceCost, "Loading CosmWasm module: query")
+
 	ctx = ctx.WithGasMeter(sdk.NewGasMeter(k.queryGasLimit))
 
 	codeInfo, prefixStore, err := k.contractInstance(ctx, contractAddr)
diff --git a/x/wasm/internal/keeper/keeper_test.go b/x/wasm/internal/keeper/keeper_test.go
index f668a5dad5c..b2c19cc6aae 100644
--- a/x/wasm/internal/keeper/keeper_test.go
+++ b/x/wasm/internal/keeper/keeper_test.go
@@ -203,7 +203,7 @@ func TestInstantiate(t *testing.T) {
 	require.Equal(t, "cosmos18vd8fpwxzck93qlwghaj6arh4p7c5n89uzcee5", addr.String())
 
 	gasAfter := ctx.GasMeter().GasConsumed()
-	require.Equal(t, uint64(0x78c3), gasAfter-gasBefore)
+	require.Equal(t, uint64(0x11503), gasAfter-gasBefore)
 
 	// ensure it is stored properly
 	info := keeper.GetContractInfo(ctx, addr)
@@ -298,7 +298,7 @@ func TestExecute(t *testing.T) {
 
 	// make sure gas is properly deducted from ctx
 	gasAfter := ctx.GasMeter().GasConsumed()
-	require.Equal(t, uint64(0x7f9e), gasAfter-gasBefore)
+	require.Equal(t, uint64(0x11bde), gasAfter-gasBefore)
 
 	// ensure bob now exists and got both payments released
 	bobAcct = accKeeper.GetAccount(ctx, bob)