diff --git a/docs/demo.md b/docs/demo.md
index 6a04efd..e6a81f8 100644
--- a/docs/demo.md
+++ b/docs/demo.md
@@ -9,12 +9,13 @@
     ```bash
     cargo install tmkms --features=softsign --version=0.14.0
     ```
-- testnet-state.json ([exported testnet state](./run-first-validator.md#export-testnet-state)) 
+- Install `gzip` using `sudo apt install gzip`
+- testnet-state.gz ([exported testnet state](./run-first-validator.md#export-testnet-state)) 
 - distribution.json (JSON containing the `lps_lockup` distribution)
 
 ## Steps
 
-- In current working directory demo, keep exported `testnet-state.json` and `distribution.json` file from prerequisites
+- In current working directory demo, keep exported `testnet-state.gz` and `distribution.json` file from prerequisites
 
 - Fetch stack:
 
@@ -28,6 +29,15 @@
   export CWD=$(pwd)
   ```
 
+- Copy over compressed file before this
+
+  ```
+  gzip -dc $CWD/testnet-state.gz > $CWD/testnet-state.json
+
+  # Remove zip folder
+  rm -rf testnet-state.gz
+  ```
+
 - Set envs:
 
   ```bash
diff --git a/docs/run-first-validator.md b/docs/run-first-validator.md
index 8e212f5..cdeac55 100644
--- a/docs/run-first-validator.md
+++ b/docs/run-first-validator.md
@@ -4,6 +4,7 @@
 
 - [ansible](playbooks/README.md#ansible-installation)
 - [laconic-so](https://github.com/cerc-io/stack-orchestrator/?tab=readme-ov-file#install)
+- Install `gzip` using `sudo apt install gzip`
 
 ## Export testnet state
 
@@ -33,7 +34,7 @@
   ~/cerc/laconicd-stack/scripts/export-testnet-state.sh <absolute-path-to-testnet-deployment>
   ```
 
-  - The file will be generated in `<absolute-path-to-testnet-deployment>/export/testnet-state.json`
+  - The compressed gzip will be generated at `<absolute-path-to-testnet-deployment>/export/testnet-state.gz`
 
 ## Generate mainnet genesis file
 
@@ -43,6 +44,15 @@
   laconic-so fetch-stack git.vdb.to/cerc-io/laconicd-stack --git-ssh --pull
   ```
 
+- Copy over compressed file before this
+
+  ```
+  gzip -dc <absolute-path-to-testnet-deployment>/export/testnet-state.gz > testnet-state.json
+
+  # Remove zip folder
+  rm -rf <absolute-path-to-testnet-deployment>/export/testnet-state.gz
+  ```
+
 - Copy over the exported `testnet-state.json` file to target machine
 
 - Copy over the LPS lockup distribution `distribution.json` file to target machine
diff --git a/scripts/export-testnet-state.sh b/scripts/export-testnet-state.sh
index 8a2a74e..757f4d4 100755
--- a/scripts/export-testnet-state.sh
+++ b/scripts/export-testnet-state.sh
@@ -19,7 +19,7 @@ OUTPUT_DIR=${TESTNET_DEPLOYMENT_DIR}/export
 mkdir -p $OUTPUT_DIR
 
 # Export state from testnet chain
-testnet_state_file="$OUTPUT_DIR/testnet-state.json.gz"
+testnet_state_file="$OUTPUT_DIR/testnet-state.gz"
 docker run -it \
   -v ${TESTNET_DEPLOYMENT_DIR}/data/laconicd-data:/root/testnet-deployment/.laconicd \
   cerc/laconicd:local bash -c "laconicd export --home /root/testnet-deployment/.laconicd" \