diff --git a/.pylintrc b/.pylintrc
index 4735c2b29e..6dba6f0946 100644
--- a/.pylintrc
+++ b/.pylintrc
@@ -36,7 +36,7 @@ disable=C0103,C0201,C0301,C0302,W0105,W0707,W1202,W1203,R0801,E1136,E0611,C0209,
 # C0206: consider-using-dict-items
 
 [IMPORTS]
-ignored-modules=bech32,ecdsa,lru,eth_typing,eth_keys,eth_account,ipfshttpclient,werkzeug,openapi_spec_validator,aiohttp,multidict,yoti_python_sdk,defusedxml,gym,fetch,matplotlib,memory_profiler,numpy,oef,openapi_core,psutil,tensorflow,temper,skimage,web3,aioprometheus,pyaes,Crypto,asn1crypto,cosmpy,google,coverage,pylint,pytest,gitpython,protobuf,docker,signal,anchorpy,cryptography.fernet,solana,solders
+ignored-modules=bech32,ecdsa,lru,eth_typing,eth_keys,eth_account,ipfshttpclient,werkzeug,openapi_spec_validator,aiohttp,multidict,yoti_python_sdk,defusedxml,gym,fetch,matplotlib,memory_profiler,numpy,oef,openapi_core,psutil,tensorflow,temper,skimage,web3,aioprometheus,pyaes,Crypto,asn1crypto,cosmpy,google,coverage,pylint,pytest,gitpython,protobuf,docker,signal,anchorpy,cryptography.fernet,solana,solders,flashbots,hexbytes
 
 [DESIGN]
 min-public-methods=1
diff --git a/HISTORY.md b/HISTORY.md
index e297547b21..0721adaa03 100644
--- a/HISTORY.md
+++ b/HISTORY.md
@@ -1,6 +1,15 @@
 # Release History - open AEA
 
 
+## 1.40.0 (2023-09-26)
+
+AEA:
+- Removes the `web3py` fork as a dependency
+- Bumps the protobuf to `protobuf>=4.21.6,<5.0.0`
+- Updates protocol buffers compiler to `v24.3`
+- Updates the protocol generator
+- Removes unused layers from the user image and uses minimal python image as base
+
 ## 1.39.0.post1 (2023-09-21)
 
 AEA:
diff --git a/SECURITY.md b/SECURITY.md
index 7ef7e78c57..8c656b657f 100644
--- a/SECURITY.md
+++ b/SECURITY.md
@@ -8,8 +8,8 @@ The following table shows which versions of `open-aea` are currently being suppo
 
 | Version   | Supported          |
 | --------- | ------------------ |
-| `1.39.x`   | :white_check_mark: |
-| `< 1.39.0.post1` | :x:                |
+| `1.40.x`   | :white_check_mark: |
+| `< 1.40.0` | :x:                |
 
 ## Reporting a Vulnerability
 
diff --git a/aea/__version__.py b/aea/__version__.py
index b909a544dd..1e2c92210c 100644
--- a/aea/__version__.py
+++ b/aea/__version__.py
@@ -23,7 +23,7 @@
 __title__ = "open-aea"
 __description__ = "Open Autonomous Economic Agent framework (without vendor lock-in)"
 __url__ = "https://github.com/valory-xyz/open-aea.git"
-__version__ = "1.39.0.post1"
+__version__ = "1.40.0"
 __author__ = "Valory AG"
 __license__ = "Apache-2.0"
 __copyright__ = "2021 Valory AG, 2019 Fetch.AI Limited"
diff --git a/deploy-image/Dockerfile b/deploy-image/Dockerfile
index 94bfe53dfb..40d3ba74b7 100644
--- a/deploy-image/Dockerfile
+++ b/deploy-image/Dockerfile
@@ -16,7 +16,7 @@ RUN apk add --no-cache go
 
 # aea installation
 RUN pip install --upgrade pip
-RUN pip install --upgrade --force-reinstall open-aea[all]==1.39.0.post1 "open-aea-cli-ipfs<2.0.0,>=1.39.0.post1"
+RUN pip install --upgrade --force-reinstall open-aea[all]==1.40.0 "open-aea-cli-ipfs<2.0.0,>=1.40.0"
 
 # directories and aea cli config
 WORKDIR /home/agents
diff --git a/deploy-image/README.md b/deploy-image/README.md
index 9a3c2679db..6ad2096b4c 100644
--- a/deploy-image/README.md
+++ b/deploy-image/README.md
@@ -11,7 +11,7 @@ The example uses the `fetchai/my_first_aea` project. You will likely want to mod
 Install subversion, then download the example directory to your local working directory
 
 ``` bash
-svn checkout https://github.com/valory-xyz/open-aea/tags/v1.39.0.post1/packages packages
+svn checkout https://github.com/valory-xyz/open-aea/tags/v1.40.0/packages packages
 ```
 
 ### Modify scripts
diff --git a/develop-image/docker-env.sh b/develop-image/docker-env.sh
index 54ae19be8f..bd5b6b5341 100755
--- a/develop-image/docker-env.sh
+++ b/develop-image/docker-env.sh
@@ -1,7 +1,7 @@
 #!/bin/bash
 
 # Swap the following lines if you want to work with 'latest'
-DOCKER_IMAGE_TAG=valory/open-aea-develop:1.39.0.post1
+DOCKER_IMAGE_TAG=valory/open-aea-develop:1.40.0
 # DOCKER_IMAGE_TAG=valory/open-aea-develop:latest
 
 DOCKER_BUILD_CONTEXT_DIR=..
diff --git a/docs/upgrading.md b/docs/upgrading.md
index 11e6bf3e5e..49622181a5 100644
--- a/docs/upgrading.md
+++ b/docs/upgrading.md
@@ -9,6 +9,13 @@ Below we describe the additional manual steps required to upgrade between differ
 
 ### Upgrade guide
 
+## `v1.39.0.post1` to `v1.40.0`
+
+- `open-aea-web3` has been replaced with `web3py`
+- `protobuf` has been bumped to `protobuf>=4.21.6,<5.0.0`, this means you will have to bump your protocol generator to `v24.3` and generate your protocol packages again.
+- Because of the protobuf version bump hardware wallet plugin might now work as expected, so please export `PROTOCOL_BUFFERS_PYTHON_IMPLEMENTATION="python"` to use the hardware wallet without any issues
+- The `valory/open-aea-user` image will use Python 3.11 as default interpreter for running AEAs
+
 ## `v1.39.0` to `v1.39.0.post1`
 
 - No backwards incompatible changes
diff --git a/examples/tac_deploy/Dockerfile b/examples/tac_deploy/Dockerfile
index 135500b24f..56368b3737 100644
--- a/examples/tac_deploy/Dockerfile
+++ b/examples/tac_deploy/Dockerfile
@@ -19,7 +19,7 @@ RUN apk add --no-cache go
 
 # aea installation
 RUN python -m pip install --upgrade pip
-RUN pip install --upgrade --force-reinstall open-aea[all]==1.39.0.post1
+RUN pip install --upgrade --force-reinstall open-aea[all]==1.40.0
 
 # directories and aea cli config
 COPY /.aea /home/.aea
diff --git a/plugins/aea-cli-benchmark/setup.py b/plugins/aea-cli-benchmark/setup.py
index 1a8d5f3519..bb2e4b53b4 100755
--- a/plugins/aea-cli-benchmark/setup.py
+++ b/plugins/aea-cli-benchmark/setup.py
@@ -26,7 +26,7 @@
 
 setup(
     name="open-aea-cli-benchmark",
-    version="1.39.0.post1",
+    version="1.40.0",
     author="Valory AG",
     license="Apache-2.0",
     description="CLI extension for AEA framework benchmarking.",
diff --git a/plugins/aea-cli-ipfs/setup.py b/plugins/aea-cli-ipfs/setup.py
index 5b0a3ee8b4..389bfe53c0 100755
--- a/plugins/aea-cli-ipfs/setup.py
+++ b/plugins/aea-cli-ipfs/setup.py
@@ -28,7 +28,7 @@
 
 setup(
     name="open-aea-cli-ipfs",
-    version="1.39.0.post1",
+    version="1.40.0",
     author="Valory AG",
     license="Apache-2.0",
     description="CLI extension for open AEA framework wrapping IPFS functionality.",
diff --git a/plugins/aea-ledger-cosmos/setup.py b/plugins/aea-ledger-cosmos/setup.py
index c95904c296..6d89491373 100644
--- a/plugins/aea-ledger-cosmos/setup.py
+++ b/plugins/aea-ledger-cosmos/setup.py
@@ -26,7 +26,7 @@
 
 setup(
     name="open-aea-ledger-cosmos",
-    version="1.39.0.post1",
+    version="1.40.0",
     author="Valory AG",
     license="Apache-2.0",
     description="Python package wrapping the public and private key cryptography and ledger api of Cosmos.",
diff --git a/plugins/aea-ledger-ethereum-flashbots/setup.py b/plugins/aea-ledger-ethereum-flashbots/setup.py
index 4444c6a8b4..f9fa8ca41b 100644
--- a/plugins/aea-ledger-ethereum-flashbots/setup.py
+++ b/plugins/aea-ledger-ethereum-flashbots/setup.py
@@ -25,7 +25,7 @@
 
 setup(
     name="open-aea-ledger-ethereum-flashbots",
-    version="1.39.0.post1",
+    version="1.40.0",
     author="Valory AG",
     license="Apache-2.0",
     description="Python package extending the default open-aea ethereum ledger plugin to add support for flashbots.",
@@ -41,7 +41,7 @@
     },
     python_requires=">=3.9,<4.0",
     install_requires=[
-        "open-aea-ledger-ethereum~=1.39.0",
+        "open-aea-ledger-ethereum~=1.40.0",
         "open-aea-flashbots==1.4.0",
     ],
     tests_require=["pytest"],
diff --git a/plugins/aea-ledger-ethereum-hwi/setup.py b/plugins/aea-ledger-ethereum-hwi/setup.py
index 7192bf28a5..7f729a8edf 100644
--- a/plugins/aea-ledger-ethereum-hwi/setup.py
+++ b/plugins/aea-ledger-ethereum-hwi/setup.py
@@ -25,7 +25,7 @@
 
 setup(
     name="open-aea-ledger-ethereum-hwi",
-    version="1.39.0.post1",
+    version="1.40.0",
     author="Valory AG",
     license="Apache-2.0",
     description="Python package wrapping the public and private key cryptography and support for hardware wallet interactions.",
@@ -42,7 +42,7 @@
         "web3>=6.0.0,<7",
         "ipfshttpclient==0.8.0a2",
         "eth-account>=0.8.0,<0.9.0",
-        "open-aea-ledger-ethereum~=1.39.0.post1",
+        "open-aea-ledger-ethereum~=1.40.0",
         "ledgerwallet==0.1.3",
         "protobuf>=4.21.6,<5.0.0",
         "construct<=2.10.61",
diff --git a/plugins/aea-ledger-ethereum/setup.py b/plugins/aea-ledger-ethereum/setup.py
index 1bc5c74873..4cc791d04c 100644
--- a/plugins/aea-ledger-ethereum/setup.py
+++ b/plugins/aea-ledger-ethereum/setup.py
@@ -26,7 +26,7 @@
 
 setup(
     name="open-aea-ledger-ethereum",
-    version="1.39.0.post1",
+    version="1.40.0",
     author="Valory AG",
     license="Apache-2.0",
     description="Python package wrapping the public and private key cryptography and ledger api of Ethereum.",
diff --git a/plugins/aea-ledger-fetchai/setup.py b/plugins/aea-ledger-fetchai/setup.py
index 045640d602..e9e598a739 100644
--- a/plugins/aea-ledger-fetchai/setup.py
+++ b/plugins/aea-ledger-fetchai/setup.py
@@ -31,7 +31,7 @@
 
 setup(
     name="open-aea-ledger-fetchai",
-    version="1.39.0.post1",
+    version="1.40.0",
     author="Valory AG",
     license="Apache-2.0",
     description="Python package wrapping the public and private key cryptography and ledger API of Fetch.AI.",
@@ -44,7 +44,7 @@
             "test_tools/data/*",
         ]
     },
-    install_requires=["open-aea-ledger-cosmos~=1.39.0.post1"],
+    install_requires=["open-aea-ledger-cosmos~=1.40.0"],
     tests_require=["pytest"],
     entry_points={
         "aea.cryptos": ["fetchai = aea_ledger_fetchai:FetchAICrypto"],
diff --git a/plugins/aea-ledger-solana/setup.py b/plugins/aea-ledger-solana/setup.py
index 2c27f94e03..db3c75a8c9 100644
--- a/plugins/aea-ledger-solana/setup.py
+++ b/plugins/aea-ledger-solana/setup.py
@@ -25,7 +25,7 @@
 
 setup(
     name="open-aea-ledger-solana",
-    version="1.39.0.post1",
+    version="1.40.0",
     author="dassy23",
     license="Apache-2.0",
     description="Python package wrapping the public and private key cryptography and ledger api of solana.",
diff --git a/scripts/check_pipfile_and_toxini.py b/scripts/check_pipfile_and_toxini.py
index c0cd69ed71..d980fd50f6 100755
--- a/scripts/check_pipfile_and_toxini.py
+++ b/scripts/check_pipfile_and_toxini.py
@@ -39,6 +39,7 @@
     "memory-profiler",
     "apduboy",
     "matplotlib",
+    "open-aea-flashbots",
 }
 
 
diff --git a/scripts/install.ps1 b/scripts/install.ps1
index 1f095b2102..277626dffe 100644
--- a/scripts/install.ps1
+++ b/scripts/install.ps1
@@ -34,7 +34,7 @@ function instal_choco_golang_gcc {
 }
 function install_aea {
 	echo "Install aea"
-    $output=pip install open-aea[all]==1.39.0.post1 --force --no-cache-dir 2>&1 |out-string;
+    $output=pip install open-aea[all]==1.40.0 --force --no-cache-dir 2>&1 |out-string;
     if ($LastExitCode -ne 0) {
         echo $output
         echo "AEA install failed!"
diff --git a/scripts/install.sh b/scripts/install.sh
index 43dd9c10cb..1a2d43a4ba 100755
--- a/scripts/install.sh
+++ b/scripts/install.sh
@@ -42,7 +42,7 @@ function is_python_version_ok() {
 
 function install_aea (){
 	echo "Install AEA"
-	output=$(pip3 install --user open-aea[all]==1.39.0.post1 --force --no-cache-dir)
+	output=$(pip3 install --user open-aea[all]==1.40.0 --force --no-cache-dir)
 	if [[  $? -ne 0 ]];
 	then
 		echo "$output"
diff --git a/skaffold.yaml b/skaffold.yaml
index 379f6d68e7..c2ee0782f7 100644
--- a/skaffold.yaml
+++ b/skaffold.yaml
@@ -5,7 +5,7 @@ metadata:
 build:
   tagPolicy:
     envTemplate:
-      template: "1.39.0.post1"
+      template: "1.40.0"
   artifacts:
   - image: valory/open-aea-develop
     docker:
@@ -24,7 +24,7 @@ profiles:
     build:
       tagPolicy:
         envTemplate:
-          template: "1.39.0.post1"
+          template: "1.40.0"
       artifacts:
       - image: valory/open-aea-docs
         docker:
diff --git a/tox.ini b/tox.ini
index 008746614e..145b39f5ae 100644
--- a/tox.ini
+++ b/tox.ini
@@ -115,6 +115,7 @@ commands =
 deps =
     {[tests-common]deps}
     pytest-custom-exit-code==0.3.0
+    open-aea-flashbots==1.4.0
 commands =
     {[commands-local-install]commands}
     pytest -rfE plugins/aea-ledger-fetchai/tests --durations=0 --cov-report=html --cov-report=xml --cov-report=term --cov-report=term-missing --cov=aea_ledger_fetchai --cov-config=.coveragerc --suppress-no-test-exit-code --cov-append {posargs}
@@ -125,7 +126,7 @@ commands =
     python -m pip install --no-deps file://{toxinidir}/plugins/aea-ledger-ethereum-hwi
     pytest -rfE plugins/aea-ledger-ethereum-hwi/tests --durations=0 --cov-report=html --cov-report=xml --cov-report=term --cov-report=term-missing --cov=aea_ledger_ethereum_hwi --cov-config=.coveragerc --suppress-no-test-exit-code --cov-append {posargs}
 
-    python -m pip install file://{toxinidir}/plugins/aea-ledger-ethereum-flashbots
+    python -m pip install --no-deps file://{toxinidir}/plugins/aea-ledger-ethereum-flashbots
     pytest -rfE plugins/aea-ledger-ethereum-flashbots/tests --durations=0 --cov-report=html --cov-report=xml --cov-report=term --cov-report=term-missing --cov=aea_ledger_ethereum_flashbots --cov-config=.coveragerc --suppress-no-test-exit-code --cov-append {posargs}
 
     python -m pip install file://{toxinidir}/plugins/aea-ledger-solana
@@ -316,7 +317,7 @@ deps =
     tomte[pylint]==0.2.13
 commands =
     python -m pip install --no-deps file://{toxinidir}/plugins/aea-ledger-ethereum
-    python -m pip install file://{toxinidir}/plugins/aea-ledger-ethereum-flashbots
+    python -m pip install --no-deps file://{toxinidir}/plugins/aea-ledger-ethereum-flashbots
     python -m pip install --no-deps file://{toxinidir}/plugins/aea-ledger-cosmos
     python -m pip install --no-deps file://{toxinidir}/plugins/aea-ledger-fetchai
     python -m pip install --no-deps file://{toxinidir}/plugins/aea-ledger-solana
diff --git a/user-image/Dockerfile b/user-image/Dockerfile
index 3f69c14f74..ddaac650aa 100644
--- a/user-image/Dockerfile
+++ b/user-image/Dockerfile
@@ -7,7 +7,7 @@ ENV LANG C.UTF-8
 RUN apt update && apt install -y python3.11-dev python3-pip -y && apt autoremove && apt autoclean
 
 RUN pip3 install --upgrade pip
-RUN pip3 install "open-aea[all]==1.39.0.post1" open-aea-cli-ipfs==1.39.0.post1
+RUN pip3 install "open-aea[all]==1.40.0" open-aea-cli-ipfs==1.40.0
 
 COPY user-image/openssl.cnf /etc/ssl
 
diff --git a/user-image/docker-env.sh b/user-image/docker-env.sh
index 1b01eab34a..e6659286c8 100644
--- a/user-image/docker-env.sh
+++ b/user-image/docker-env.sh
@@ -1,7 +1,7 @@
 #!/bin/bash
 
 # Swap the following lines if you want to work with 'latest'
-DOCKER_IMAGE_TAG=valory/open-aea-user:1.39.0.post1
+DOCKER_IMAGE_TAG=valory/open-aea-user:1.40.0
 # DOCKER_IMAGE_TAG=valory/open-aea-user:latest
 
 DOCKER_BUILD_CONTEXT_DIR=..