diff --git a/pkg/consensus/consensus.go b/pkg/consensus/consensus.go
index 96847d904..8b9d686f1 100644
--- a/pkg/consensus/consensus.go
+++ b/pkg/consensus/consensus.go
@@ -335,7 +335,11 @@ func (s *service) processBlock(b block.Block) {
 	bb.Script = *(s.getBlockWitness(bb))
 
 	if err := s.Chain.AddBlock(bb); err != nil {
-		s.log.Warn("error on add block", zap.Error(err))
+		// The block might already be added via the regular network
+		// interaction.
+		if _, errget := s.Chain.GetBlock(bb.Hash()); errget != nil {
+			s.log.Warn("error on add block", zap.Error(err))
+		}
 	} else {
 		s.Config.RelayBlock(bb)
 	}
diff --git a/pkg/consensus/consensus_test.go b/pkg/consensus/consensus_test.go
index 2d642203a..8fc19be22 100644
--- a/pkg/consensus/consensus_test.go
+++ b/pkg/consensus/consensus_test.go
@@ -5,7 +5,6 @@ import (
 
 	"github.com/CityOfZion/neo-go/config"
 	"github.com/CityOfZion/neo-go/pkg/core"
-	"github.com/CityOfZion/neo-go/pkg/core/mempool"
 	"github.com/CityOfZion/neo-go/pkg/core/storage"
 	"github.com/CityOfZion/neo-go/pkg/core/transaction"
 	"github.com/CityOfZion/neo-go/pkg/crypto/keys"
@@ -22,8 +21,7 @@ func TestNewService(t *testing.T) {
 		Type: transaction.MinerType,
 		Data: &transaction.MinerTX{Nonce: 12345},
 	}
-	item := mempool.NewPoolItem(tx, new(feer))
-	srv.Chain.GetMemPool().TryAdd(tx.Hash(), item)
+	require.NoError(t, srv.Chain.PoolTx(tx))
 
 	var txx []block.Transaction
 	require.NotPanics(t, func() { txx = srv.getVerifiedTx(1) })
@@ -40,10 +38,7 @@ func TestService_GetVerified(t *testing.T) {
 		newMinerTx(3),
 		newMinerTx(4),
 	}
-	pool := srv.Chain.GetMemPool()
-	item := mempool.NewPoolItem(txs[3], new(feer))
-
-	require.True(t, pool.TryAdd(txs[3].Hash(), item))
+	require.NoError(t, srv.Chain.PoolTx(txs[3]))
 
 	hashes := []util.Uint256{txs[0].Hash(), txs[1].Hash(), txs[2].Hash()}
 
@@ -68,8 +63,7 @@ func TestService_GetVerified(t *testing.T) {
 
 	t.Run("more than half of the last proposal will be reused", func(t *testing.T) {
 		for _, tx := range txs[:2] {
-			item := mempool.NewPoolItem(tx, new(feer))
-			require.True(t, pool.TryAdd(tx.Hash(), item))
+			require.NoError(t, srv.Chain.PoolTx(tx))
 		}
 
 		txx := srv.getVerifiedTx(10)
@@ -119,8 +113,7 @@ func TestService_getTx(t *testing.T) {
 
 		require.Equal(t, nil, srv.getTx(h))
 
-		item := mempool.NewPoolItem(tx, new(feer))
-		srv.Chain.GetMemPool().TryAdd(h, item)
+		require.NoError(t, srv.Chain.PoolTx(tx))
 
 		got := srv.getTx(h)
 		require.NotNil(t, got)
diff --git a/pkg/core/blockchain.go b/pkg/core/blockchain.go
index 285a0eb98..0a22cf76b 100644
--- a/pkg/core/blockchain.go
+++ b/pkg/core/blockchain.go
@@ -7,6 +7,7 @@ import (
 	"math/big"
 	"sort"
 	"strconv"
+	"sync"
 	"sync/atomic"
 	"time"
 
@@ -41,6 +42,15 @@ const (
 	defaultMemPoolSize = 50000
 )
 
+var (
+	// ErrAlreadyExists is returned when trying to add some already existing
+	// transaction into the pool (not specifying whether it exists in the
+	// chain or mempool).
+	ErrAlreadyExists = errors.New("already exists")
+	// ErrOOM is returned when adding transaction to the memory pool because
+	// it reached its full capacity.
+	ErrOOM = errors.New("no space left in the memory pool")
+)
 var (
 	genAmount         = []int{8, 7, 6, 5, 4, 3, 2, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1}
 	decrementInterval = 2000000
@@ -51,6 +61,19 @@ var (
 type Blockchain struct {
 	config config.ProtocolConfiguration
 
+	// The only way chain state changes is by adding blocks, so we can't
+	// allow concurrent block additions. It differs from the next lock in
+	// that it's only for AddBlock method itself, the chain state is
+	// protected by the lock below, but holding it during all of AddBlock
+	// is too expensive (because the state only changes when persisting
+	// change cache).
+	addLock sync.Mutex
+
+	// This lock ensures blockchain immutability for operations that need
+	// that while performing their tasks. It's mostly used as a read lock
+	// with the only writer being the block addition logic.
+	lock sync.RWMutex
+
 	// Data access object for CRUD operations around storage.
 	dao *dao
 
@@ -251,6 +274,9 @@ func (bc *Blockchain) Close() {
 // AddBlock accepts successive block for the Blockchain, verifies it and
 // stores internally. Eventually it will be persisted to the backing storage.
 func (bc *Blockchain) AddBlock(block *block.Block) error {
+	bc.addLock.Lock()
+	defer bc.addLock.Unlock()
+
 	expectedHeight := bc.BlockHeight() + 1
 	if expectedHeight != block.Index {
 		return fmt.Errorf("expected block %d, but passed block %d", expectedHeight, block.Index)
@@ -575,6 +601,9 @@ func (bc *Blockchain) storeBlock(block *block.Block) error {
 			}
 		}
 	}
+	bc.lock.Lock()
+	defer bc.lock.Unlock()
+
 	_, err := cache.Persist()
 	if err != nil {
 		return err
@@ -582,9 +611,7 @@ func (bc *Blockchain) storeBlock(block *block.Block) error {
 	bc.topBlock.Store(block)
 	atomic.StoreUint32(&bc.blockHeight, block.Index)
 	updateBlockHeightMetric(block.Index)
-	for _, tx := range block.Transactions {
-		bc.memPool.Remove(tx.Hash())
-	}
+	bc.memPool.RemoveStale(bc.isTxStillRelevant)
 	return nil
 }
 
@@ -963,8 +990,8 @@ func (bc *Blockchain) IsLowPriority(t *transaction.Transaction) bool {
 }
 
 // GetMemPool returns the memory pool of the blockchain.
-func (bc *Blockchain) GetMemPool() mempool.Pool {
-	return bc.memPool
+func (bc *Blockchain) GetMemPool() *mempool.Pool {
+	return &bc.memPool
 }
 
 // VerifyBlock verifies block against its current state.
@@ -982,11 +1009,8 @@ func (bc *Blockchain) VerifyBlock(block *block.Block) error {
 	return bc.verifyBlockWitnesses(block, prevHeader)
 }
 
-// VerifyTx verifies whether a transaction is bonafide or not. Block parameter
-// is used for easy interop access and can be omitted for transactions that are
-// not yet added into any block.
-// Golang implementation of Verify method in C# (https://github.com/neo-project/neo/blob/master/neo/Network/P2P/Payloads/Transaction.cs#L270).
-func (bc *Blockchain) VerifyTx(t *transaction.Transaction, block *block.Block) error {
+// verifyTx verifies whether a transaction is bonafide or not.
+func (bc *Blockchain) verifyTx(t *transaction.Transaction, block *block.Block) error {
 	if io.GetVarSize(t) > transaction.MaxTransactionSize {
 		return errors.Errorf("invalid transaction size = %d. It shoud be less then MaxTransactionSize = %d", io.GetVarSize(t), transaction.MaxTransactionSize)
 	}
@@ -1017,6 +1041,69 @@ func (bc *Blockchain) VerifyTx(t *transaction.Transaction, block *block.Block) e
 	return bc.verifyTxWitnesses(t, block)
 }
 
+// isTxStillRelevant is a callback for mempool transaction filtering after the
+// new block addition. It returns false for transactions already present in the
+// chain (added by the new block), transactions using some inputs that are
+// already used (double spends) and does witness reverification for non-standard
+// contracts. It operates under the assumption that full transaction verification
+// was already done so we don't need to check basic things like size, input/output
+// correctness, etc.
+func (bc *Blockchain) isTxStillRelevant(t *transaction.Transaction) bool {
+	var recheckWitness bool
+
+	if bc.dao.HasTransaction(t.Hash()) {
+		return false
+	}
+	if bc.dao.IsDoubleSpend(t) {
+		return false
+	}
+	for i := range t.Scripts {
+		if !vm.IsStandardContract(t.Scripts[i].VerificationScript) {
+			recheckWitness = true
+			break
+		}
+	}
+	if recheckWitness {
+		return bc.verifyTxWitnesses(t, nil) == nil
+	}
+	return true
+
+}
+
+// VerifyTx verifies whether a transaction is bonafide or not. Block parameter
+// is used for easy interop access and can be omitted for transactions that are
+// not yet added into any block.
+// Golang implementation of Verify method in C# (https://github.com/neo-project/neo/blob/master/neo/Network/P2P/Payloads/Transaction.cs#L270).
+func (bc *Blockchain) VerifyTx(t *transaction.Transaction, block *block.Block) error {
+	bc.lock.RLock()
+	defer bc.lock.RUnlock()
+	return bc.verifyTx(t, block)
+}
+
+// PoolTx verifies and tries to add given transaction into the mempool.
+func (bc *Blockchain) PoolTx(t *transaction.Transaction) error {
+	bc.lock.RLock()
+	defer bc.lock.RUnlock()
+
+	if bc.HasTransaction(t.Hash()) {
+		return ErrAlreadyExists
+	}
+	if err := bc.verifyTx(t, nil); err != nil {
+		return err
+	}
+	if err := bc.memPool.Add(t, bc); err != nil {
+		switch err {
+		case mempool.ErrOOM:
+			return ErrOOM
+		case mempool.ErrConflict:
+			return ErrAlreadyExists
+		default:
+			return err
+		}
+	}
+	return nil
+}
+
 func (bc *Blockchain) verifyInputs(t *transaction.Transaction) bool {
 	for i := 1; i < len(t.Inputs); i++ {
 		for j := 0; j < i; j++ {
diff --git a/pkg/core/blockchainer.go b/pkg/core/blockchainer.go
index 34b6d70cf..79e6bc08f 100644
--- a/pkg/core/blockchainer.go
+++ b/pkg/core/blockchainer.go
@@ -40,6 +40,7 @@ type Blockchainer interface {
 	GetUnspentCoinState(util.Uint256) *UnspentCoinState
 	References(t *transaction.Transaction) map[transaction.Input]*transaction.Output
 	mempool.Feer // fee interface
+	PoolTx(*transaction.Transaction) error
 	VerifyTx(*transaction.Transaction, *block.Block) error
-	GetMemPool() mempool.Pool
+	GetMemPool() *mempool.Pool
 }
diff --git a/pkg/core/mempool/mem_pool.go b/pkg/core/mempool/mem_pool.go
index 444f2e36e..a2f3ef9af 100644
--- a/pkg/core/mempool/mem_pool.go
+++ b/pkg/core/mempool/mem_pool.go
@@ -1,6 +1,7 @@
 package mempool
 
 import (
+	"errors"
 	"sort"
 	"sync"
 	"time"
@@ -9,43 +10,62 @@ import (
 	"github.com/CityOfZion/neo-go/pkg/util"
 )
 
-// Item represents a transaction in the the Memory pool.
-type Item struct {
-	txn       *transaction.Transaction
-	timeStamp time.Time
-	fee       Feer
+var (
+	// ErrConflict is returned when transaction being added is incompatible
+	// with the contents of the memory pool (using the same inputs as some
+	// other transaction in the pool)
+	ErrConflict = errors.New("conflicts with the memory pool")
+	// ErrDup is returned when transaction being added is already present
+	// in the memory pool.
+	ErrDup = errors.New("already in the memory pool")
+	// ErrOOM is returned when transaction just doesn't fit in the memory
+	// pool because of its capacity constraints.
+	ErrOOM = errors.New("out of memory")
+)
+
+// item represents a transaction in the the Memory pool.
+type item struct {
+	txn        *transaction.Transaction
+	timeStamp  time.Time
+	perByteFee util.Fixed8
+	netFee     util.Fixed8
+	isLowPrio  bool
 }
 
-// Items is a slice of Item.
-type Items []*Item
+// items is a slice of item.
+type items []*item
 
 // Pool stores the unconfirms transactions.
 type Pool struct {
-	lock                        *sync.RWMutex
-	unsortedTxn                 map[util.Uint256]*Item
-	unverifiedTxn               map[util.Uint256]*Item
-	sortedHighPrioTxn           Items
-	sortedLowPrioTxn            Items
-	unverifiedSortedHighPrioTxn Items
-	unverifiedSortedLowPrioTxn  Items
+	lock         sync.RWMutex
+	verifiedMap  map[util.Uint256]*item
+	verifiedTxes items
 
 	capacity int
 }
 
-func (p Items) Len() int           { return len(p) }
-func (p Items) Swap(i, j int)      { p[i], p[j] = p[j], p[i] }
-func (p Items) Less(i, j int) bool { return p[i].CompareTo(p[j]) < 0 }
+func (p items) Len() int           { return len(p) }
+func (p items) Swap(i, j int)      { p[i], p[j] = p[j], p[i] }
+func (p items) Less(i, j int) bool { return p[i].CompareTo(p[j]) < 0 }
 
-// CompareTo returns the difference between two Items.
+// CompareTo returns the difference between two items.
 // difference < 0 implies p < otherP.
 // difference = 0 implies p = otherP.
 // difference > 0 implies p > otherP.
-func (p Item) CompareTo(otherP *Item) int {
+func (p *item) CompareTo(otherP *item) int {
 	if otherP == nil {
 		return 1
 	}
 
-	if p.fee.IsLowPriority(p.txn) && p.fee.IsLowPriority(otherP.txn) {
+	if !p.isLowPrio && otherP.isLowPrio {
+		return 1
+	}
+
+	if p.isLowPrio && !otherP.isLowPrio {
+		return -1
+	}
+
+	if p.isLowPrio && otherP.isLowPrio {
 		thisIsClaimTx := p.txn.Type == transaction.ClaimType
 		otherIsClaimTx := otherP.txn.Type == transaction.ClaimType
 
@@ -60,15 +80,11 @@ func (p Item) CompareTo(otherP *Item) int {
 	}
 
 	// Fees sorted ascending.
-	pFPB := p.fee.FeePerByte(p.txn)
-	otherFPB := p.fee.FeePerByte(otherP.txn)
-	if ret := pFPB.CompareTo(otherFPB); ret != 0 {
+	if ret := p.perByteFee.CompareTo(otherP.perByteFee); ret != 0 {
 		return ret
 	}
 
-	pNF := p.fee.NetworkFee(p.txn)
-	otherNF := p.fee.NetworkFee(otherP.txn)
-	if ret := pNF.CompareTo(otherNF); ret != 0 {
+	if ret := p.netFee.CompareTo(otherP.netFee); ret != 0 {
 		return ret
 	}
 
@@ -77,205 +93,158 @@ func (p Item) CompareTo(otherP *Item) int {
 }
 
 // Count returns the total number of uncofirm transactions.
-func (mp Pool) Count() int {
+func (mp *Pool) Count() int {
 	mp.lock.RLock()
 	defer mp.lock.RUnlock()
+	return mp.count()
+}
 
-	return len(mp.unsortedTxn) + len(mp.unverifiedTxn)
+// count is an internal unlocked version of Count.
+func (mp *Pool) count() int {
+	return len(mp.verifiedTxes)
 }
 
 // ContainsKey checks if a transactions hash is in the Pool.
-func (mp Pool) ContainsKey(hash util.Uint256) bool {
+func (mp *Pool) ContainsKey(hash util.Uint256) bool {
 	mp.lock.RLock()
 	defer mp.lock.RUnlock()
 
-	if _, ok := mp.unsortedTxn[hash]; ok {
-		return true
-	}
+	return mp.containsKey(hash)
+}
 
-	if _, ok := mp.unverifiedTxn[hash]; ok {
+// containsKey is an internal unlocked version of ContainsKey.
+func (mp *Pool) containsKey(hash util.Uint256) bool {
+	if _, ok := mp.verifiedMap[hash]; ok {
 		return true
 	}
 
 	return false
 }
 
-// TryAdd try to add the Item to the Pool.
-func (mp Pool) TryAdd(hash util.Uint256, pItem *Item) bool {
-	var pool Items
-
+// Add tries to add given transaction to the Pool.
+func (mp *Pool) Add(t *transaction.Transaction, fee Feer) error {
+	var pItem = &item{
+		txn:        t,
+		timeStamp:  time.Now().UTC(),
+		perByteFee: fee.FeePerByte(t),
+		netFee:     fee.NetworkFee(t),
+		isLowPrio:  fee.IsLowPriority(t),
+	}
 	mp.lock.Lock()
-	if _, ok := mp.unsortedTxn[hash]; ok {
+	if !mp.verifyInputs(t) {
 		mp.lock.Unlock()
-		return false
+		return ErrConflict
+	}
+	if mp.containsKey(t.Hash()) {
+		mp.lock.Unlock()
+		return ErrDup
 	}
-	mp.unsortedTxn[hash] = pItem
-	mp.lock.Unlock()
 
-	if pItem.fee.IsLowPriority(pItem.txn) {
-		pool = mp.sortedLowPrioTxn
+	mp.verifiedMap[t.Hash()] = pItem
+	// Insert into sorted array (from max to min, that could also be done
+	// using sort.Sort(sort.Reverse()), but it incurs more overhead. Notice
+	// also that we're searching for position that is strictly more
+	// prioritized than our new item because we do expect a lot of
+	// transactions with the same priority and appending to the end of the
+	// slice is always more efficient.
+	n := sort.Search(len(mp.verifiedTxes), func(n int) bool {
+		return pItem.CompareTo(mp.verifiedTxes[n]) > 0
+	})
+
+	// We've reached our capacity already.
+	if len(mp.verifiedTxes) == mp.capacity {
+		// Less prioritized than the least prioritized we already have, won't fit.
+		if n == len(mp.verifiedTxes) {
+			mp.lock.Unlock()
+			return ErrOOM
+		}
+		// Ditch the last one.
+		unlucky := mp.verifiedTxes[len(mp.verifiedTxes)-1]
+		delete(mp.verifiedMap, unlucky.txn.Hash())
+		mp.verifiedTxes[len(mp.verifiedTxes)-1] = pItem
 	} else {
-		pool = mp.sortedHighPrioTxn
+		mp.verifiedTxes = append(mp.verifiedTxes, pItem)
 	}
-
-	mp.lock.Lock()
-	pool = append(pool, pItem)
-	sort.Sort(pool)
+	if n != len(mp.verifiedTxes)-1 {
+		copy(mp.verifiedTxes[n+1:], mp.verifiedTxes[n:])
+		mp.verifiedTxes[n] = pItem
+	}
+	updateMempoolMetrics(len(mp.verifiedTxes))
 	mp.lock.Unlock()
-
-	if mp.Count() > mp.capacity {
-		(&mp).RemoveOverCapacity()
-	}
-	mp.lock.RLock()
-	_, ok := mp.unsortedTxn[hash]
-	updateMempoolMetrics(len(mp.unsortedTxn), len(mp.unverifiedTxn))
-	mp.lock.RUnlock()
-	return ok
+	return nil
 }
 
 // Remove removes an item from the mempool, if it exists there (and does
 // nothing if it doesn't).
 func (mp *Pool) Remove(hash util.Uint256) {
-	var mapAndPools = []struct {
-		unsortedMap map[util.Uint256]*Item
-		sortedPools []*Items
-	}{
-		{unsortedMap: mp.unsortedTxn, sortedPools: []*Items{&mp.sortedHighPrioTxn, &mp.sortedLowPrioTxn}},
-		{unsortedMap: mp.unverifiedTxn, sortedPools: []*Items{&mp.unverifiedSortedHighPrioTxn, &mp.unverifiedSortedLowPrioTxn}},
-	}
 	mp.lock.Lock()
-	for _, mapAndPool := range mapAndPools {
-		if _, ok := mapAndPool.unsortedMap[hash]; ok {
-			delete(mapAndPool.unsortedMap, hash)
-			for _, pool := range mapAndPool.sortedPools {
-				var num int
-				var item *Item
-				for num, item = range *pool {
-					if hash.Equals(item.txn.Hash()) {
-						break
-					}
-				}
-				if num < len(*pool)-1 {
-					*pool = append((*pool)[:num], (*pool)[num+1:]...)
-				} else if num == len(*pool)-1 {
-					*pool = (*pool)[:num]
-				}
+	if _, ok := mp.verifiedMap[hash]; ok {
+		var num int
+		delete(mp.verifiedMap, hash)
+		for num := range mp.verifiedTxes {
+			if hash.Equals(mp.verifiedTxes[num].txn.Hash()) {
+				break
 			}
 		}
+		if num < len(mp.verifiedTxes)-1 {
+			mp.verifiedTxes = append(mp.verifiedTxes[:num], mp.verifiedTxes[num+1:]...)
+		} else if num == len(mp.verifiedTxes)-1 {
+			mp.verifiedTxes = mp.verifiedTxes[:num]
+		}
 	}
-	updateMempoolMetrics(len(mp.unsortedTxn), len(mp.unverifiedTxn))
+	updateMempoolMetrics(len(mp.verifiedTxes))
 	mp.lock.Unlock()
 }
 
-// RemoveOverCapacity removes transactions with lowest fees until the total number of transactions
-// in the Pool is within the capacity of the Pool.
-func (mp *Pool) RemoveOverCapacity() {
-	for mp.Count()-mp.capacity > 0 {
-		mp.lock.Lock()
-		if minItem, argPosition := getLowestFeeTransaction(mp.sortedLowPrioTxn, mp.unverifiedSortedLowPrioTxn); minItem != nil {
-			if argPosition == 1 {
-				// minItem belongs to the mp.sortedLowPrioTxn slice.
-				// The corresponding unsorted pool is is mp.unsortedTxn.
-				delete(mp.unsortedTxn, minItem.txn.Hash())
-				mp.sortedLowPrioTxn = append(mp.sortedLowPrioTxn[:0], mp.sortedLowPrioTxn[1:]...)
-			} else {
-				// minItem belongs to the mp.unverifiedSortedLowPrioTxn slice.
-				// The corresponding unsorted pool is is mp.unverifiedTxn.
-				delete(mp.unverifiedTxn, minItem.txn.Hash())
-				mp.unverifiedSortedLowPrioTxn = append(mp.unverifiedSortedLowPrioTxn[:0], mp.unverifiedSortedLowPrioTxn[1:]...)
-
-			}
-		} else if minItem, argPosition := getLowestFeeTransaction(mp.sortedHighPrioTxn, mp.unverifiedSortedHighPrioTxn); minItem != nil {
-			if argPosition == 1 {
-				// minItem belongs to the mp.sortedHighPrioTxn slice.
-				// The corresponding unsorted pool is is mp.unsortedTxn.
-				delete(mp.unsortedTxn, minItem.txn.Hash())
-				mp.sortedHighPrioTxn = append(mp.sortedHighPrioTxn[:0], mp.sortedHighPrioTxn[1:]...)
-			} else {
-				// minItem belongs to the mp.unverifiedSortedHighPrioTxn slice.
-				// The corresponding unsorted pool is is mp.unverifiedTxn.
-				delete(mp.unverifiedTxn, minItem.txn.Hash())
-				mp.unverifiedSortedHighPrioTxn = append(mp.unverifiedSortedHighPrioTxn[:0], mp.unverifiedSortedHighPrioTxn[1:]...)
-
-			}
+// RemoveStale filters verified transactions through the given function keeping
+// only the transactions for which it returns a true result. It's used to quickly
+// drop part of the mempool that is now invalid after the block acceptance.
+func (mp *Pool) RemoveStale(isOK func(*transaction.Transaction) bool) {
+	mp.lock.Lock()
+	// We expect a lot of changes, so it's easier to allocate a new slice
+	// rather than move things in an old one.
+	newVerifiedTxes := make([]*item, 0, mp.capacity)
+	for _, itm := range mp.verifiedTxes {
+		if isOK(itm.txn) {
+			newVerifiedTxes = append(newVerifiedTxes, itm)
+		} else {
+			delete(mp.verifiedMap, itm.txn.Hash())
 		}
-		updateMempoolMetrics(len(mp.unsortedTxn), len(mp.unverifiedTxn))
-		mp.lock.Unlock()
-	}
-
-}
-
-// NewPoolItem returns a new Item.
-func NewPoolItem(t *transaction.Transaction, fee Feer) *Item {
-	return &Item{
-		txn:       t,
-		timeStamp: time.Now().UTC(),
-		fee:       fee,
 	}
+	mp.verifiedTxes = newVerifiedTxes
+	mp.lock.Unlock()
 }
 
 // NewMemPool returns a new Pool struct.
 func NewMemPool(capacity int) Pool {
 	return Pool{
-		lock:          new(sync.RWMutex),
-		unsortedTxn:   make(map[util.Uint256]*Item),
-		unverifiedTxn: make(map[util.Uint256]*Item),
-		capacity:      capacity,
+		verifiedMap:  make(map[util.Uint256]*item),
+		verifiedTxes: make([]*item, 0, capacity),
+		capacity:     capacity,
 	}
 }
 
 // TryGetValue returns a transaction if it exists in the memory pool.
-func (mp Pool) TryGetValue(hash util.Uint256) (*transaction.Transaction, bool) {
+func (mp *Pool) TryGetValue(hash util.Uint256) (*transaction.Transaction, bool) {
 	mp.lock.RLock()
 	defer mp.lock.RUnlock()
-	if pItem, ok := mp.unsortedTxn[hash]; ok {
-		return pItem.txn, ok
-	}
-
-	if pItem, ok := mp.unverifiedTxn[hash]; ok {
+	if pItem, ok := mp.verifiedMap[hash]; ok {
 		return pItem.txn, ok
 	}
 
 	return nil, false
 }
 
-// getLowestFeeTransaction returns the Item with the lowest fee amongst the "verifiedTxnSorted"
-// and "unverifiedTxnSorted" Items along with a integer. The integer can assume two values, 1 and 2 which indicate
-// that the Item with the lowest fee was found in "verifiedTxnSorted" respectively in "unverifiedTxnSorted".
-// "verifiedTxnSorted" and "unverifiedTxnSorted" are sorted slice order by transaction fee ascending. This means that
-// the transaction with lowest fee start at index 0.
-// Reference: GetLowestFeeTransaction method in C# (https://github.com/neo-project/neo/blob/master/neo/Ledger/MemoryPool.cs)
-func getLowestFeeTransaction(verifiedTxnSorted Items, unverifiedTxnSorted Items) (*Item, int) {
-	minItem := min(unverifiedTxnSorted)
-	verifiedMin := min(verifiedTxnSorted)
-	if verifiedMin == nil || (minItem != nil && verifiedMin.CompareTo(minItem) >= 0) {
-		return minItem, 2
-	}
-
-	minItem = verifiedMin
-	return minItem, 1
-
-}
-
-// min returns the minimum item in a ascending sorted slice of pool items.
-// The function can't be applied to unsorted slice!
-func min(sortedPool Items) *Item {
-	if len(sortedPool) == 0 {
-		return nil
-	}
-	return sortedPool[0]
-}
-
 // GetVerifiedTransactions returns a slice of Input from all the transactions in the memory pool
 // whose hash is not included in excludedHashes.
 func (mp *Pool) GetVerifiedTransactions() []*transaction.Transaction {
 	mp.lock.RLock()
 	defer mp.lock.RUnlock()
 
-	var t = make([]*transaction.Transaction, len(mp.unsortedTxn))
+	var t = make([]*transaction.Transaction, len(mp.verifiedTxes))
 	var i int
 
-	for _, p := range mp.unsortedTxn {
+	for _, p := range mp.verifiedTxes {
 		t[i] = p.txn
 		i++
 	}
@@ -283,16 +252,16 @@ func (mp *Pool) GetVerifiedTransactions() []*transaction.Transaction {
 	return t
 }
 
-// Verify verifies if the inputs of a transaction tx are already used in any other transaction in the memory pool.
-// If yes, the transaction tx is not a valid transaction and the function return false.
-// If no, the transaction tx is a valid transaction and the function return true.
-func (mp Pool) Verify(tx *transaction.Transaction) bool {
-	mp.lock.RLock()
-	defer mp.lock.RUnlock()
-	for _, item := range mp.unsortedTxn {
-		for i := range item.txn.Inputs {
+// verifyInputs is an internal unprotected version of Verify.
+func (mp *Pool) verifyInputs(tx *transaction.Transaction) bool {
+	if len(tx.Inputs) == 0 {
+		return true
+	}
+	for num := range mp.verifiedTxes {
+		txn := mp.verifiedTxes[num].txn
+		for i := range txn.Inputs {
 			for j := 0; j < len(tx.Inputs); j++ {
-				if item.txn.Inputs[i] == tx.Inputs[j] {
+				if txn.Inputs[i] == tx.Inputs[j] {
 					return false
 				}
 			}
@@ -301,3 +270,12 @@ func (mp Pool) Verify(tx *transaction.Transaction) bool {
 
 	return true
 }
+
+// Verify verifies if the inputs of a transaction tx are already used in any other transaction in the memory pool.
+// If yes, the transaction tx is not a valid transaction and the function return false.
+// If no, the transaction tx is a valid transaction and the function return true.
+func (mp *Pool) Verify(tx *transaction.Transaction) bool {
+	mp.lock.RLock()
+	defer mp.lock.RUnlock()
+	return mp.verifyInputs(tx)
+}
diff --git a/pkg/core/mempool/mem_pool_test.go b/pkg/core/mempool/mem_pool_test.go
index 6da40043b..4cd529a06 100644
--- a/pkg/core/mempool/mem_pool_test.go
+++ b/pkg/core/mempool/mem_pool_test.go
@@ -1,6 +1,7 @@
 package mempool
 
 import (
+	"sort"
 	"testing"
 
 	"github.com/CityOfZion/neo-go/pkg/core/transaction"
@@ -35,13 +36,12 @@ func (fs *FeerStub) SystemFee(*transaction.Transaction) util.Fixed8 {
 
 func testMemPoolAddRemoveWithFeer(t *testing.T, fs Feer) {
 	mp := NewMemPool(10)
-	tx := newMinerTX()
-	item := NewPoolItem(tx, fs)
+	tx := newMinerTX(0)
 	_, ok := mp.TryGetValue(tx.Hash())
 	require.Equal(t, false, ok)
-	require.Equal(t, true, mp.TryAdd(tx.Hash(), item))
+	require.NoError(t, mp.Add(tx, fs))
 	// Re-adding should fail.
-	require.Equal(t, false, mp.TryAdd(tx.Hash(), item))
+	require.Error(t, mp.Add(tx, fs))
 	tx2, ok := mp.TryGetValue(tx.Hash())
 	require.Equal(t, true, ok)
 	require.Equal(t, tx, tx2)
@@ -49,12 +49,8 @@ func testMemPoolAddRemoveWithFeer(t *testing.T, fs Feer) {
 	_, ok = mp.TryGetValue(tx.Hash())
 	require.Equal(t, false, ok)
 	// Make sure nothing left in the mempool after removal.
-	assert.Equal(t, 0, len(mp.unsortedTxn))
-	assert.Equal(t, 0, len(mp.unverifiedTxn))
-	assert.Equal(t, 0, len(mp.sortedHighPrioTxn))
-	assert.Equal(t, 0, len(mp.sortedLowPrioTxn))
-	assert.Equal(t, 0, len(mp.unverifiedSortedHighPrioTxn))
-	assert.Equal(t, 0, len(mp.unverifiedSortedLowPrioTxn))
+	assert.Equal(t, 0, len(mp.verifiedMap))
+	assert.Equal(t, 0, len(mp.verifiedTxes))
 }
 
 func TestMemPoolAddRemove(t *testing.T) {
@@ -66,32 +62,156 @@ func TestMemPoolAddRemove(t *testing.T) {
 
 func TestMemPoolVerify(t *testing.T) {
 	mp := NewMemPool(10)
-	tx := newMinerTX()
+	tx := newMinerTX(1)
 	inhash1 := random.Uint256()
 	tx.Inputs = append(tx.Inputs, transaction.Input{PrevHash: inhash1, PrevIndex: 0})
 	require.Equal(t, true, mp.Verify(tx))
-	item := NewPoolItem(tx, &FeerStub{})
-	require.Equal(t, true, mp.TryAdd(tx.Hash(), item))
+	require.NoError(t, mp.Add(tx, &FeerStub{}))
 
-	tx2 := newMinerTX()
+	tx2 := newMinerTX(2)
 	inhash2 := random.Uint256()
 	tx2.Inputs = append(tx2.Inputs, transaction.Input{PrevHash: inhash2, PrevIndex: 0})
 	require.Equal(t, true, mp.Verify(tx2))
-	item = NewPoolItem(tx2, &FeerStub{})
-	require.Equal(t, true, mp.TryAdd(tx2.Hash(), item))
+	require.NoError(t, mp.Add(tx2, &FeerStub{}))
 
-	tx3 := newMinerTX()
+	tx3 := newMinerTX(3)
 	// Different index number, but the same PrevHash as in tx1.
 	tx3.Inputs = append(tx3.Inputs, transaction.Input{PrevHash: inhash1, PrevIndex: 1})
 	require.Equal(t, true, mp.Verify(tx3))
 	// The same input as in tx2.
 	tx3.Inputs = append(tx3.Inputs, transaction.Input{PrevHash: inhash2, PrevIndex: 0})
 	require.Equal(t, false, mp.Verify(tx3))
+	require.Error(t, mp.Add(tx3, &FeerStub{}))
 }
 
-func newMinerTX() *transaction.Transaction {
+func newMinerTX(i uint32) *transaction.Transaction {
 	return &transaction.Transaction{
 		Type: transaction.MinerType,
-		Data: &transaction.MinerTX{},
+		Data: &transaction.MinerTX{Nonce: i},
+	}
+}
+
+func TestOverCapacity(t *testing.T) {
+	var fs = &FeerStub{lowPriority: true}
+	const mempoolSize = 10
+	mp := NewMemPool(mempoolSize)
+
+	for i := 0; i < mempoolSize; i++ {
+		tx := newMinerTX(uint32(i))
+		require.NoError(t, mp.Add(tx, fs))
+	}
+	txcnt := uint32(mempoolSize)
+	require.Equal(t, mempoolSize, mp.Count())
+	require.Equal(t, true, sort.IsSorted(sort.Reverse(mp.verifiedTxes)))
+
+	// Claim TX has more priority than ordinary lowprio, so it should easily
+	// fit into the pool.
+	claim := &transaction.Transaction{
+		Type: transaction.ClaimType,
+		Data: &transaction.ClaimTX{},
+	}
+	require.NoError(t, mp.Add(claim, fs))
+	require.Equal(t, mempoolSize, mp.Count())
+	require.Equal(t, true, sort.IsSorted(sort.Reverse(mp.verifiedTxes)))
+
+	// Fees are also prioritized.
+	fs.netFee = util.Fixed8FromFloat(0.0001)
+	for i := 0; i < mempoolSize-1; i++ {
+		tx := newMinerTX(txcnt)
+		txcnt++
+		require.NoError(t, mp.Add(tx, fs))
+		require.Equal(t, mempoolSize, mp.Count())
+		require.Equal(t, true, sort.IsSorted(sort.Reverse(mp.verifiedTxes)))
+	}
+	// Less prioritized txes are not allowed anymore.
+	fs.netFee = util.Fixed8FromFloat(0.00001)
+	tx := newMinerTX(txcnt)
+	txcnt++
+	require.Error(t, mp.Add(tx, fs))
+	require.Equal(t, mempoolSize, mp.Count())
+	require.Equal(t, true, sort.IsSorted(sort.Reverse(mp.verifiedTxes)))
+
+	// But claim tx should still be there.
+	require.True(t, mp.ContainsKey(claim.Hash()))
+
+	// Low net fee, but higher per-byte fee is still a better combination.
+	fs.perByteFee = util.Fixed8FromFloat(0.001)
+	tx = newMinerTX(txcnt)
+	txcnt++
+	require.NoError(t, mp.Add(tx, fs))
+	require.Equal(t, mempoolSize, mp.Count())
+	require.Equal(t, true, sort.IsSorted(sort.Reverse(mp.verifiedTxes)))
+
+	// High priority always wins over low priority.
+	fs.lowPriority = false
+	for i := 0; i < mempoolSize; i++ {
+		tx := newMinerTX(txcnt)
+		txcnt++
+		require.NoError(t, mp.Add(tx, fs))
+		require.Equal(t, mempoolSize, mp.Count())
+		require.Equal(t, true, sort.IsSorted(sort.Reverse(mp.verifiedTxes)))
+	}
+	// Good luck with low priority now.
+	fs.lowPriority = true
+	tx = newMinerTX(txcnt)
+	require.Error(t, mp.Add(tx, fs))
+	require.Equal(t, mempoolSize, mp.Count())
+	require.Equal(t, true, sort.IsSorted(sort.Reverse(mp.verifiedTxes)))
+}
+
+func TestGetVerified(t *testing.T) {
+	var fs = &FeerStub{lowPriority: true}
+	const mempoolSize = 10
+	mp := NewMemPool(mempoolSize)
+
+	txes := make([]*transaction.Transaction, 0, mempoolSize)
+	for i := 0; i < mempoolSize; i++ {
+		tx := newMinerTX(uint32(i))
+		txes = append(txes, tx)
+		require.NoError(t, mp.Add(tx, fs))
+	}
+	require.Equal(t, mempoolSize, mp.Count())
+	verTxes := mp.GetVerifiedTransactions()
+	require.Equal(t, mempoolSize, len(verTxes))
+	for _, tx := range verTxes {
+		require.Contains(t, txes, tx)
+	}
+	for _, tx := range txes {
+		mp.Remove(tx.Hash())
+	}
+	verTxes = mp.GetVerifiedTransactions()
+	require.Equal(t, 0, len(verTxes))
+}
+
+func TestRemoveStale(t *testing.T) {
+	var fs = &FeerStub{lowPriority: true}
+	const mempoolSize = 10
+	mp := NewMemPool(mempoolSize)
+
+	txes1 := make([]*transaction.Transaction, 0, mempoolSize/2)
+	txes2 := make([]*transaction.Transaction, 0, mempoolSize/2)
+	for i := 0; i < mempoolSize; i++ {
+		tx := newMinerTX(uint32(i))
+		if i%2 == 0 {
+			txes1 = append(txes1, tx)
+		} else {
+			txes2 = append(txes2, tx)
+		}
+		require.NoError(t, mp.Add(tx, fs))
+	}
+	require.Equal(t, mempoolSize, mp.Count())
+	mp.RemoveStale(func(t *transaction.Transaction) bool {
+		for _, tx := range txes2 {
+			if tx == t {
+				return true
+			}
+		}
+		return false
+	})
+	require.Equal(t, mempoolSize/2, mp.Count())
+	verTxes := mp.GetVerifiedTransactions()
+	for _, tx := range verTxes {
+		require.NotContains(t, txes1, tx)
+		require.Contains(t, txes2, tx)
 	}
 }
diff --git a/pkg/core/mempool/prometheus.go b/pkg/core/mempool/prometheus.go
index 3d8a6a585..dbe073a0d 100644
--- a/pkg/core/mempool/prometheus.go
+++ b/pkg/core/mempool/prometheus.go
@@ -11,24 +11,14 @@ var (
 			Namespace: "neogo",
 		},
 	)
-	//mempoolUnverifiedTx prometheus metric.
-	mempoolUnverifiedTx = prometheus.NewGauge(
-		prometheus.GaugeOpts{
-			Help:      "Mempool Unverified TXs",
-			Name:      "mempool_unverified_tx",
-			Namespace: "neogo",
-		},
-	)
 )
 
 func init() {
 	prometheus.MustRegister(
 		mempoolUnsortedTx,
-		mempoolUnverifiedTx,
 	)
 }
 
-func updateMempoolMetrics(unsortedTxnLen int, unverifiedTxnLen int) {
+func updateMempoolMetrics(unsortedTxnLen int) {
 	mempoolUnsortedTx.Set(float64(unsortedTxnLen))
-	mempoolUnverifiedTx.Set(float64(unverifiedTxnLen))
 }
diff --git a/pkg/network/blockqueue.go b/pkg/network/blockqueue.go
index e26d96629..2911ffced 100644
--- a/pkg/network/blockqueue.go
+++ b/pkg/network/blockqueue.go
@@ -12,9 +12,10 @@ type blockQueue struct {
 	queue       *queue.PriorityQueue
 	checkBlocks chan struct{}
 	chain       core.Blockchainer
+	relayF      func(*block.Block)
 }
 
-func newBlockQueue(capacity int, bc core.Blockchainer, log *zap.Logger) *blockQueue {
+func newBlockQueue(capacity int, bc core.Blockchainer, log *zap.Logger, relayer func(*block.Block)) *blockQueue {
 	if log == nil {
 		return nil
 	}
@@ -24,6 +25,7 @@ func newBlockQueue(capacity int, bc core.Blockchainer, log *zap.Logger) *blockQu
 		queue:       queue.NewPriorityQueue(capacity, false),
 		checkBlocks: make(chan struct{}, 1),
 		chain:       bc,
+		relayF:      relayer,
 	}
 }
 
@@ -45,10 +47,15 @@ func (bq *blockQueue) run() {
 				if minblock.Index == bq.chain.BlockHeight()+1 {
 					err := bq.chain.AddBlock(minblock)
 					if err != nil {
-						bq.log.Warn("blockQueue: failed adding block into the blockchain",
-							zap.String("error", err.Error()),
-							zap.Uint32("blockHeight", bq.chain.BlockHeight()),
-							zap.Uint32("nextIndex", minblock.Index))
+						// The block might already be added by consensus.
+						if _, errget := bq.chain.GetBlock(minblock.Hash()); errget != nil {
+							bq.log.Warn("blockQueue: failed adding block into the blockchain",
+								zap.String("error", err.Error()),
+								zap.Uint32("blockHeight", bq.chain.BlockHeight()),
+								zap.Uint32("nextIndex", minblock.Index))
+						}
+					} else if bq.relayF != nil {
+						bq.relayF(minblock)
 					}
 				}
 			} else {
diff --git a/pkg/network/blockqueue_test.go b/pkg/network/blockqueue_test.go
index 62a43595f..af3540096 100644
--- a/pkg/network/blockqueue_test.go
+++ b/pkg/network/blockqueue_test.go
@@ -12,7 +12,7 @@ import (
 func TestBlockQueue(t *testing.T) {
 	chain := &testChain{}
 	// notice, it's not yet running
-	bq := newBlockQueue(0, chain, zaptest.NewLogger(t))
+	bq := newBlockQueue(0, chain, zaptest.NewLogger(t), nil)
 	blocks := make([]*block.Block, 11)
 	for i := 1; i < 11; i++ {
 		blocks[i] = &block.Block{Base: block.Base{Index: uint32(i)}}
diff --git a/pkg/network/helper_test.go b/pkg/network/helper_test.go
index 823d78525..1ab191d87 100644
--- a/pkg/network/helper_test.go
+++ b/pkg/network/helper_test.go
@@ -118,7 +118,7 @@ func (chain testChain) GetUnspentCoinState(util.Uint256) *core.UnspentCoinState
 	panic("TODO")
 }
 
-func (chain testChain) GetMemPool() mempool.Pool {
+func (chain testChain) GetMemPool() *mempool.Pool {
 	panic("TODO")
 }
 
@@ -126,6 +126,10 @@ func (chain testChain) IsLowPriority(*transaction.Transaction) bool {
 	panic("TODO")
 }
 
+func (chain testChain) PoolTx(*transaction.Transaction) error {
+	panic("TODO")
+}
+
 func (chain testChain) VerifyTx(*transaction.Transaction, *block.Block) error {
 	panic("TODO")
 }
diff --git a/pkg/network/server.go b/pkg/network/server.go
index c62d7f34c..5a45ed393 100644
--- a/pkg/network/server.go
+++ b/pkg/network/server.go
@@ -13,7 +13,6 @@ import (
 	"github.com/CityOfZion/neo-go/pkg/consensus"
 	"github.com/CityOfZion/neo-go/pkg/core"
 	"github.com/CityOfZion/neo-go/pkg/core/block"
-	"github.com/CityOfZion/neo-go/pkg/core/mempool"
 	"github.com/CityOfZion/neo-go/pkg/core/transaction"
 	"github.com/CityOfZion/neo-go/pkg/network/payload"
 	"github.com/CityOfZion/neo-go/pkg/util"
@@ -91,7 +90,6 @@ func NewServer(config ServerConfig, chain core.Blockchainer, log *zap.Logger) (*
 	s := &Server{
 		ServerConfig: config,
 		chain:        chain,
-		bQueue:       newBlockQueue(maxBlockBatch, chain, log),
 		id:           randomID(),
 		quit:         make(chan struct{}),
 		register:     make(chan Peer),
@@ -100,6 +98,7 @@ func NewServer(config ServerConfig, chain core.Blockchainer, log *zap.Logger) (*
 		connected:    atomic.NewBool(false),
 		log:          log,
 	}
+	s.bQueue = newBlockQueue(maxBlockBatch, chain, log, s.relayBlock)
 
 	srv, err := consensus.NewService(consensus.Config{
 		Logger:     log,
@@ -735,7 +734,11 @@ func (s *Server) broadcastHPMessage(msg *Message) {
 // relayBlock tells all the other connected nodes about the given block.
 func (s *Server) relayBlock(b *block.Block) {
 	msg := s.MkMsg(CMDInv, payload.NewInventory(payload.BlockType, []util.Uint256{b.Hash()}))
-	s.broadcastMessage(msg)
+	// Filter out nodes that are more current (avoid spamming the network
+	// during initial sync).
+	s.iteratePeersWithSendMsg(msg, Peer.EnqueuePacket, func(p Peer) bool {
+		return p.Handshaked() && p.LastBlockIndex() < b.Index
+	})
 }
 
 // verifyAndPoolTX verifies the TX and adds it to the local mempool.
@@ -743,17 +746,18 @@ func (s *Server) verifyAndPoolTX(t *transaction.Transaction) RelayReason {
 	if t.Type == transaction.MinerType {
 		return RelayInvalid
 	}
-	if s.chain.HasTransaction(t.Hash()) {
-		return RelayAlreadyExists
-	}
-	if err := s.chain.VerifyTx(t, nil); err != nil {
-		return RelayInvalid
-	}
 	// TODO: Implement Plugin.CheckPolicy?
 	//if (!Plugin.CheckPolicy(transaction))
 	// return RelayResultReason.PolicyFail;
-	if ok := s.chain.GetMemPool().TryAdd(t.Hash(), mempool.NewPoolItem(t, s.chain)); !ok {
-		return RelayOutOfMemory
+	if err := s.chain.PoolTx(t); err != nil {
+		switch err {
+		case core.ErrAlreadyExists:
+			return RelayAlreadyExists
+		case core.ErrOOM:
+			return RelayOutOfMemory
+		default:
+			return RelayInvalid
+		}
 	}
 	return RelaySucceed
 }