diff --git a/src/wallet/rpcwallet.cpp b/src/wallet/rpcwallet.cpp
index b3f405db51..1a733421ab 100644
--- a/src/wallet/rpcwallet.cpp
+++ b/src/wallet/rpcwallet.cpp
@@ -3123,7 +3123,7 @@ static secp256k1_context *secp256k1_ctx;
 class CSecp256k1Init {
 public:
     CSecp256k1Init() {
-        secp256k1_ctx = secp256k1_context_create(SECP256K1_CONTEXT_VERIFY);
+        secp256k1_ctx = secp256k1_context_create(SECP256K1_CONTEXT_VERIFY | SECP256K1_CONTEXT_SIGN);
     }
     ~CSecp256k1Init() {
         secp256k1_context_destroy(secp256k1_ctx);
@@ -3170,12 +3170,29 @@ CScriptID calculate_contract(const CScript& federationRedeemScript, const CBitco
                 size_t pub_len = 33;
                 unsigned char *pub_start = &(*(sdpc - pub_len));
                 CHMAC_SHA256(pub_start, pub_len).Write(fullcontract, 40).Finalize(tweak);
-                secp256k1_pubkey pubkey;
-                assert(secp256k1_ec_pubkey_parse(secp256k1_ctx, &pubkey, pub_start, pub_len) == 1);
+                secp256k1_pubkey watchman;
+                secp256k1_pubkey tweaked;
+                assert(secp256k1_ec_pubkey_parse(secp256k1_ctx, &watchman, pub_start, pub_len) == 1);
+                assert(secp256k1_ec_pubkey_parse(secp256k1_ctx, &tweaked, pub_start, pub_len) == 1);
                 // If someone creates a tweak that makes this fail, they broke SHA256
-                assert(secp256k1_ec_pubkey_tweak_add(secp256k1_ctx, &pubkey, tweak) == 1);
-                assert(secp256k1_ec_pubkey_serialize(secp256k1_ctx, pub_start, &pub_len, &pubkey, SECP256K1_EC_COMPRESSED) == 1);
+                assert(secp256k1_ec_pubkey_tweak_add(secp256k1_ctx, &tweaked, tweak) == 1);
+                assert(secp256k1_ec_pubkey_serialize(secp256k1_ctx, pub_start, &pub_len, &tweaked, SECP256K1_EC_COMPRESSED) == 1);
                 assert(pub_len == 33);
+
+                // Sanity checks to reduce pegin risk. If the tweaked
+                // value flips a bit, we may lose pegin funds irretrievably.
+                // We take the tweak, derive its pubkey and check that
+                // `tweaked - watchman = tweak` to check the computation
+                // two different ways
+                secp256k1_pubkey tweaked2;
+                assert(secp256k1_ec_pubkey_create(secp256k1_ctx, &tweaked2, tweak));
+                assert(secp256k1_ec_pubkey_negate(secp256k1_ctx, &watchman));
+                secp256k1_pubkey* pubkey_combined[2];
+                pubkey_combined[0] = &watchman;
+                pubkey_combined[1] = &tweaked;
+                secp256k1_pubkey maybe_tweaked2;
+                assert(secp256k1_ec_pubkey_combine(secp256k1_ctx, &maybe_tweaked2, pubkey_combined, 2));
+                assert(!memcmp(&maybe_tweaked2, &tweaked2, 64));
             }
         }
     }