diff --git a/PENDING.md b/PENDING.md
index bb9ce719e7..36ad292fe3 100644
--- a/PENDING.md
+++ b/PENDING.md
@@ -60,6 +60,7 @@ CLI flag.
 
 ### SDK
 
+* \#3753 Remove no-longer-used governance penalty parameter
 * \#3679 Consistent operators across Coins, DecCoins, Int, Dec
           replaced: Minus->Sub Plus->Add Div->Quo
 * [\#3665] Overhaul sdk.Uint type in preparation for Coins Int -> Uint migration.
diff --git a/cmd/gaia/app/sim_test.go b/cmd/gaia/app/sim_test.go
index 7e4d465fe6..fd3ef9804a 100644
--- a/cmd/gaia/app/sim_test.go
+++ b/cmd/gaia/app/sim_test.go
@@ -161,9 +161,8 @@ func appStateRandomizedFn(r *rand.Rand, accs []simulation.Account, genesisTimest
 			VotingPeriod: vp,
 		},
 		TallyParams: gov.TallyParams{
-			Threshold:         sdk.NewDecWithPrec(5, 1),
-			Veto:              sdk.NewDecWithPrec(334, 3),
-			GovernancePenalty: sdk.NewDecWithPrec(1, 2),
+			Threshold: sdk.NewDecWithPrec(5, 1),
+			Veto:      sdk.NewDecWithPrec(334, 3),
 		},
 	}
 	fmt.Printf("Selected randomly generated governance parameters:\n\t%+v\n", govGenesis)
diff --git a/docs/spec/governance/01_concepts.md b/docs/spec/governance/01_concepts.md
index 9dce635505..9c287d54fc 100644
--- a/docs/spec/governance/01_concepts.md
+++ b/docs/spec/governance/01_concepts.md
@@ -139,20 +139,7 @@ If a delegator does not vote, it will inherit its validator vote.
 
 ### Validator’s punishment for non-voting
 
-Validators are required to vote on all proposals to ensure that results have 
-legitimacy. Voting is part of validators' directives and failure to do it will 
-result in a penalty. 
-
-If a validator’s address is not in the list of addresses that voted on a 
-proposal and the vote is closed (i.e. `MinDeposit` was reached and `Voting 
-period` is over), then the validator will automatically be partially slashed by
-`GovernancePenalty`.
-
-*Note: Need to define values for `GovernancePenalty`*
-
-**Exception:** If a proposal is accepted via the special condition of having a ratio of `Yes` votes to `InitTotalVotingPower` that exceeds 2:3, validators cannot be punished for not having voted on it. 
-That is because the proposal will close as soon as the ratio exceeds 2:3, 
-making it mechanically impossible for some validators to vote on it.
+At present, validators are not punished for failing to vote.
 
 ### Governance address
 
diff --git a/docs/spec/governance/02_state.md b/docs/spec/governance/02_state.md
index 75af3cf22c..4a2fd08d1d 100644
--- a/docs/spec/governance/02_state.md
+++ b/docs/spec/governance/02_state.md
@@ -25,7 +25,6 @@ type TallyParams struct {
   Quorum            sdk.Dec  //  Minimum percentage of stake that needs to vote for a proposal to be considered valid
   Threshold         sdk.Dec  //  Minimum proportion of Yes votes for proposal to pass. Initial value: 0.5
   Veto              sdk.Dec  //  Minimum proportion of Veto votes to Total votes ratio for proposal to be vetoed. Initial value: 1/3
-  GovernancePenalty sdk.Dec  //  Penalty if validator does not vote
 }
 ```
 
diff --git a/x/gov/genesis.go b/x/gov/genesis.go
index 957381d590..6426f30df7 100644
--- a/x/gov/genesis.go
+++ b/x/gov/genesis.go
@@ -58,10 +58,9 @@ func DefaultGenesisState() GenesisState {
 			VotingPeriod: DefaultPeriod,
 		},
 		TallyParams: TallyParams{
-			Quorum:            sdk.NewDecWithPrec(334, 3),
-			Threshold:         sdk.NewDecWithPrec(5, 1),
-			Veto:              sdk.NewDecWithPrec(334, 3),
-			GovernancePenalty: sdk.NewDecWithPrec(1, 2),
+			Quorum:    sdk.NewDecWithPrec(334, 3),
+			Threshold: sdk.NewDecWithPrec(5, 1),
+			Veto:      sdk.NewDecWithPrec(334, 3),
 		},
 	}
 }
@@ -93,12 +92,6 @@ func ValidateGenesis(data GenesisState) error {
 			veto.String())
 	}
 
-	govPenalty := data.TallyParams.GovernancePenalty
-	if govPenalty.IsNegative() || govPenalty.GT(sdk.OneDec()) {
-		return fmt.Errorf("Governance vote veto threshold should be positive and less or equal to one, is %s",
-			govPenalty.String())
-	}
-
 	if data.DepositParams.MaxDepositPeriod > data.VotingParams.VotingPeriod {
 		return fmt.Errorf("Governance deposit period should be less than or equal to the voting period (%ds), is %ds",
 			data.VotingParams.VotingPeriod, data.DepositParams.MaxDepositPeriod)
diff --git a/x/gov/params.go b/x/gov/params.go
index 54601c7a62..ed0fa5ea4c 100644
--- a/x/gov/params.go
+++ b/x/gov/params.go
@@ -26,19 +26,17 @@ func (dp DepositParams) Equal(dp2 DepositParams) bool {
 
 // Param around Tallying votes in governance
 type TallyParams struct {
-	Quorum            sdk.Dec `json:"quorum"`             //  Minimum percentage of total stake needed to vote for a result to be considered valid
-	Threshold         sdk.Dec `json:"threshold"`          //  Minimum propotion of Yes votes for proposal to pass. Initial value: 0.5
-	Veto              sdk.Dec `json:"veto"`               //  Minimum value of Veto votes to Total votes ratio for proposal to be vetoed. Initial value: 1/3
-	GovernancePenalty sdk.Dec `json:"governance_penalty"` //  Penalty if validator does not vote
+	Quorum    sdk.Dec `json:"quorum"`    //  Minimum percentage of total stake needed to vote for a result to be considered valid
+	Threshold sdk.Dec `json:"threshold"` //  Minimum propotion of Yes votes for proposal to pass. Initial value: 0.5
+	Veto      sdk.Dec `json:"veto"`      //  Minimum value of Veto votes to Total votes ratio for proposal to be vetoed. Initial value: 1/3
 }
 
 func (tp TallyParams) String() string {
 	return fmt.Sprintf(`Tally Params:
   Quorum:             %s
   Threshold:          %s
-  Veto:               %s
-  Governance Penalty: %s`, tp.Quorum,
-		tp.Threshold, tp.Veto, tp.GovernancePenalty)
+  Veto:               %s`,
+		tp.Quorum, tp.Threshold, tp.Veto)
 }
 
 // Param around Voting in governance