diff --git a/server/v2/stf/branch/mergeiter.go b/server/v2/stf/branch/mergeiter.go
index e71b88cffc42..108d19e7e041 100644
--- a/server/v2/stf/branch/mergeiter.go
+++ b/server/v2/stf/branch/mergeiter.go
@@ -7,229 +7,162 @@ import (
 	corestore "cosmossdk.io/core/store"
 )
 
+var (
+	errInvalidIterator = errors.New("invalid iterator")
+)
+
 // mergedIterator merges a parent Iterator and a cache Iterator.
-// The cache iterator may return nil keys to signal that an item
-// had been deleted (but not deleted in the parent).
-// If the cache iterator has the same key as the parent, the
-// cache shadows (overrides) the parent.
-type mergedIterator struct {
-	parent    corestore.Iterator
-	cache     corestore.Iterator
-	ascending bool
-
-	valid bool
+// The cache iterator may contain items that shadow or override items in the parent iterator.
+// If the cache iterator has the same key as the parent, the cache's value takes precedence.
+// Deleted items in the cache (indicated by nil values) are skipped.
+type mergedIterator[Parent, Cache corestore.Iterator] struct {
+	parent    Parent // Iterator for the parent store
+	cache     Cache  // Iterator for the cache store
+	ascending bool   // Direction of iteration
+	valid     bool   // Indicates if the iterator is in a valid state
+	currKey   []byte // Current key pointed by the iterator
+	currValue []byte // Current value corresponding to currKey
+	err       error  // Error encountered during iteration
 }
 
-var _ corestore.Iterator = (*mergedIterator)(nil)
+// Ensure mergedIterator implements the corestore.Iterator interface.
+var _ corestore.Iterator = (*mergedIterator[corestore.Iterator, corestore.Iterator])(nil)
 
-// mergeIterators merges two iterators.
-func mergeIterators(parent, cache corestore.Iterator, ascending bool) corestore.Iterator {
-	iter := &mergedIterator{
+// mergeIterators creates a new merged iterator from parent and cache iterators.
+// The 'ascending' parameter determines the direction of iteration.
+func mergeIterators[Parent, Cache corestore.Iterator](parent Parent, cache Cache, ascending bool) *mergedIterator[Parent, Cache] {
+	iter := &mergedIterator[Parent, Cache]{
 		parent:    parent,
 		cache:     cache,
 		ascending: ascending,
 	}
-
-	iter.valid = iter.skipUntilExistsOrInvalid()
+	iter.advance() // Initialize the iterator by advancing to the first valid item
 	return iter
 }
 
-// Domain implements Iterator.
-// Returns parent domain because cache and parent domains are the same.
-func (iter *mergedIterator) Domain() (start, end []byte) {
-	return iter.parent.Domain()
+// Domain returns the start and end range of the iterator.
+// It delegates to the parent iterator as both iterators share the same domain.
+func (i *mergedIterator[Parent, Cache]) Domain() (start, end []byte) {
+	return i.parent.Domain()
 }
 
-// Valid implements Iterator.
-func (iter *mergedIterator) Valid() bool {
-	return iter.valid
+// Valid checks if the iterator is in a valid state.
+// It returns true if the iterator has not reached the end.
+func (i *mergedIterator[Parent, Cache]) Valid() bool {
+	return i.valid
 }
 
-// Next implements Iterator
-func (iter *mergedIterator) Next() {
-	iter.assertValid()
-
-	switch {
-	case !iter.parent.Valid():
-		// If parent is invalid, get the next cache item.
-		iter.cache.Next()
-	case !iter.cache.Valid():
-		// If cache is invalid, get the next parent item.
-		iter.parent.Next()
-	default:
-		// Both are valid.  Compare keys.
-		keyP, keyC := iter.parent.Key(), iter.cache.Key()
-		switch iter.compare(keyP, keyC) {
-		case -1: // parent < cache
-			iter.parent.Next()
-		case 0: // parent == cache
-			iter.parent.Next()
-			iter.cache.Next()
-		case 1: // parent > cache
-			iter.cache.Next()
-		}
+// Next advances the iterator to the next valid item.
+// It skips over deleted items (with nil values) and updates the current key and value.
+func (i *mergedIterator[Parent, Cache]) Next() {
+	if !i.valid {
+		i.err = errInvalidIterator
+		return
 	}
-	iter.valid = iter.skipUntilExistsOrInvalid()
+	i.advance()
 }
 
-// Key implements Iterator
-func (iter *mergedIterator) Key() []byte {
-	iter.assertValid()
-
-	// If parent is invalid, get the cache key.
-	if !iter.parent.Valid() {
-		return iter.cache.Key()
-	}
-
-	// If cache is invalid, get the parent key.
-	if !iter.cache.Valid() {
-		return iter.parent.Key()
-	}
-
-	// Both are valid.  Compare keys.
-	keyP, keyC := iter.parent.Key(), iter.cache.Key()
-
-	cmp := iter.compare(keyP, keyC)
-	switch cmp {
-	case -1: // parent < cache
-		return keyP
-	case 0: // parent == cache
-		return keyP
-	case 1: // parent > cache
-		return keyC
-	default:
-		panic("invalid compare result")
+// Key returns the current key pointed by the iterator.
+// If the iterator is invalid, it returns nil.
+func (i *mergedIterator[Parent, Cache]) Key() []byte {
+	if !i.valid {
+		panic("called key on invalid iterator")
 	}
+	return i.currKey
 }
 
-// Value implements Iterator
-func (iter *mergedIterator) Value() []byte {
-	iter.assertValid()
-
-	// If parent is invalid, get the cache value.
-	if !iter.parent.Valid() {
-		return iter.cache.Value()
-	}
-
-	// If cache is invalid, get the parent value.
-	if !iter.cache.Valid() {
-		return iter.parent.Value()
-	}
-
-	// Both are valid.  Compare keys.
-	keyP, keyC := iter.parent.Key(), iter.cache.Key()
-
-	cmp := iter.compare(keyP, keyC)
-	switch cmp {
-	case -1: // parent < cache
-		return iter.parent.Value()
-	case 0: // parent == cache
-		return iter.cache.Value()
-	case 1: // parent > cache
-		return iter.cache.Value()
-	default:
-		panic("invalid comparison result")
+// Value returns the current value corresponding to the current key.
+// If the iterator is invalid, it returns nil.
+func (i *mergedIterator[Parent, Cache]) Value() []byte {
+	if !i.valid {
+		panic("called value on invalid iterator")
 	}
+	return i.currValue
 }
 
-// Close implements Iterator
-func (iter *mergedIterator) Close() error {
-	err1 := iter.cache.Close()
-	if err := iter.parent.Close(); err != nil {
-		return err
-	}
-
-	return err1
+// Close closes both the parent and cache iterators.
+// It returns any error encountered during the closing of the iterators.
+func (i *mergedIterator[Parent, Cache]) Close() (err error) {
+	err = errors.Join(err, i.parent.Close())
+	err = errors.Join(err, i.cache.Close())
+	i.valid = false
+	return err
 }
 
-var errInvalidIterator = errors.New("invalid merged iterator")
-
-// Error returns an error if the mergedIterator is invalid defined by the
-// Valid method.
-func (iter *mergedIterator) Error() error {
-	if !iter.Valid() {
-		return errInvalidIterator
-	}
-
-	return nil
+// Error returns any error that occurred during iteration.
+// If the iterator is valid, it returns nil.
+func (i *mergedIterator[Parent, Cache]) Error() error {
+	return i.err
 }
 
-// If not valid, panics.
-// NOTE: May have side-effect of iterating over cache.
-func (iter *mergedIterator) assertValid() {
-	if err := iter.Error(); err != nil {
-		panic(err)
-	}
-}
-
-// Like bytes.Compare but opposite if not ascending.
-func (iter *mergedIterator) compare(a, b []byte) int {
-	if iter.ascending {
-		return bytes.Compare(a, b)
-	}
-
-	return bytes.Compare(a, b) * -1
-}
-
-// Skip all delete-items from the cache w/ `key < until`.  After this function,
-// current cache item is a non-delete-item, or `until <= key`.
-// If the current cache item is not a delete item, does nothing.
-// If `until` is nil, there is no limit, and cache may end up invalid.
-// CONTRACT: cache is valid.
-func (iter *mergedIterator) skipCacheDeletes(until []byte) {
-	for iter.cache.Valid() &&
-		iter.cache.Value() == nil &&
-		(until == nil || iter.compare(iter.cache.Key(), until) < 0) {
-		iter.cache.Next()
-	}
-}
-
-// Fast forwards cache (or parent+cache in case of deleted items) until current
-// item exists, or until iterator becomes invalid.
-// Returns whether the iterator is valid.
-func (iter *mergedIterator) skipUntilExistsOrInvalid() bool {
+// advance moves the iterator to the next valid (non-deleted) item.
+// It handles merging logic between the parent and cache iterators.
+func (i *mergedIterator[Parent, Cache]) advance() {
 	for {
-		// If parent is invalid, fast-forward cache.
-		if !iter.parent.Valid() {
-			iter.skipCacheDeletes(nil)
-			return iter.cache.Valid()
+		// Check if both iterators have reached the end
+		if !i.parent.Valid() && !i.cache.Valid() {
+			i.valid = false
+			return
 		}
-		// Parent is valid.
 
-		if !iter.cache.Valid() {
-			return true
+		var key, value []byte
+
+		// If parent iterator is exhausted, use the cache iterator
+		if !i.parent.Valid() {
+			key = i.cache.Key()
+			value = i.cache.Value()
+			i.cache.Next()
+		} else if !i.cache.Valid() {
+			// If cache iterator is exhausted, use the parent iterator
+			key = i.parent.Key()
+			value = i.parent.Value()
+			i.parent.Next()
+		} else {
+			// Both iterators are valid; compare keys
+			keyP, keyC := i.parent.Key(), i.cache.Key()
+			switch cmp := i.compare(keyP, keyC); {
+			case cmp < 0:
+				// Parent key is less than cache key
+				key = keyP
+				value = i.parent.Value()
+				i.parent.Next()
+			case cmp == 0:
+				// Keys are equal; cache overrides parent
+				key = keyC
+				value = i.cache.Value()
+				i.parent.Next()
+				i.cache.Next()
+			case cmp > 0:
+				// Cache key is less than parent key
+				key = keyC
+				value = i.cache.Value()
+				i.cache.Next()
+			}
 		}
-		// Parent is valid, cache is valid.
-
-		// Compare parent and cache.
-		keyP := iter.parent.Key()
-		keyC := iter.cache.Key()
 
-		switch iter.compare(keyP, keyC) {
-		case -1: // parent < cache.
-			return true
+		// Skip deleted items (value is nil)
+		if value == nil {
+			continue
+		}
 
-		case 0: // parent == cache.
-			// Skip over if cache item is a delete.
-			valueC := iter.cache.Value()
-			if valueC == nil {
-				iter.parent.Next()
-				iter.cache.Next()
+		// Update the current key and value, and mark iterator as valid
+		i.currKey = key
+		i.currValue = value
+		i.valid = true
+		return
+	}
+}
 
-				continue
-			}
-			// Cache is not a delete.
-
-			return true // cache exists.
-		case 1: // cache < parent
-			// Skip over if cache item is a delete.
-			valueC := iter.cache.Value()
-			if valueC == nil {
-				iter.skipCacheDeletes(keyP)
-				continue
-			}
-			// Cache is not a delete.
-			return true // cache exists.
-		}
+// compare compares two byte slices a and b.
+// It returns an integer comparing a and b:
+//   - Negative if a < b
+//   - Zero if a == b
+//   - Positive if a > b
+//
+// The comparison respects the iterator's direction (ascending or descending).
+func (i *mergedIterator[Parent, Cache]) compare(a, b []byte) int {
+	if i.ascending {
+		return bytes.Compare(a, b)
 	}
+	return bytes.Compare(b, a)
 }
diff --git a/server/v2/stf/branch/mergeiter_test.go b/server/v2/stf/branch/mergeiter_test.go
index 1a9e13bbe65c..45f10d4c1b36 100644
--- a/server/v2/stf/branch/mergeiter_test.go
+++ b/server/v2/stf/branch/mergeiter_test.go
@@ -7,6 +7,52 @@ import (
 	corestore "cosmossdk.io/core/store"
 )
 
+func TestMergedIterator_Validity(t *testing.T) {
+	panics := func(f func()) {
+		defer func() {
+			r := recover()
+			if r == nil {
+				t.Error("panic expected")
+			}
+		}()
+
+		f()
+	}
+
+	t.Run("panics when calling key on invalid iter", func(t *testing.T) {
+		parent, err := newMemState().Iterator(nil, nil)
+		if err != nil {
+			t.Fatal(err)
+		}
+		cache, err := newMemState().Iterator(nil, nil)
+		if err != nil {
+			t.Fatal(err)
+		}
+
+		it := mergeIterators(parent, cache, true)
+		panics(func() {
+			it.Key()
+		})
+	})
+
+	t.Run("panics when calling value on invalid iter", func(t *testing.T) {
+		parent, err := newMemState().Iterator(nil, nil)
+		if err != nil {
+			t.Fatal(err)
+		}
+		cache, err := newMemState().Iterator(nil, nil)
+		if err != nil {
+			t.Fatal(err)
+		}
+
+		it := mergeIterators(parent, cache, true)
+
+		panics(func() {
+			it.Value()
+		})
+	})
+}
+
 func TestMergedIterator_Next(t *testing.T) {
 	specs := map[string]struct {
 		setup func() corestore.Iterator