diff --git a/changelog.md b/changelog.md
index 8c3295fc2f..9b4b336e02 100644
--- a/changelog.md
+++ b/changelog.md
@@ -1,5 +1,8 @@
 # CHANGELOG
 
+## v27.0.5
+* [3554](https://github.com/zeta-chain/node/pull/3554) - disable observation of direct to TSS Address deposits on Arbitrum and Avalanch networks
+
 ## v27.0.4
 
 ### Fixes
diff --git a/zetaclient/chains/evm/observer/inbound.go b/zetaclient/chains/evm/observer/inbound.go
index 4099164dea..ae589561d3 100644
--- a/zetaclient/chains/evm/observer/inbound.go
+++ b/zetaclient/chains/evm/observer/inbound.go
@@ -10,6 +10,7 @@ import (
 	"slices"
 	"sort"
 	"strings"
+	"sync"
 
 	sdkmath "cosmossdk.io/math"
 	"github.com/ethereum/go-ethereum/accounts/abi/bind"
@@ -19,6 +20,7 @@ import (
 	"github.com/zeta-chain/protocol-contracts/pkg/erc20custody.sol"
 	"github.com/zeta-chain/protocol-contracts/pkg/zetaconnector.non-eth.sol"
 
+	"github.com/zeta-chain/node/pkg/chains"
 	"github.com/zeta-chain/node/pkg/coin"
 	"github.com/zeta-chain/node/pkg/constant"
 	"github.com/zeta-chain/node/pkg/memo"
@@ -131,62 +133,126 @@ func (ob *Observer) ObserveInbound(ctx context.Context) error {
 		return nil
 	}
 
-	// get last scanned block height (we simply use same height for all 3 events ZetaSent, Deposited, TssRecvd)
+	var (
+		lastScannedZetaSent              uint64
+		lastScannedDeposited             uint64
+		lastScannedGatewayDeposit        uint64
+		lastScannedGatewayCall           uint64
+		lastScannedGatewayDepositAndCall uint64
+		lastScannedTssRecvd              uint64
+	)
 	// Note: using different heights for each event incurs more complexity (metrics, db, etc) and not worth it
 	startBlock, toBlock := ob.calcBlockRangeToScan(confirmedBlockNum, lastScanned, config.MaxBlocksPerPeriod)
 
+	wg := sync.WaitGroup{}
+
 	// task 1:  query evm chain for zeta sent logs (read at most 100 blocks in one go)
-	lastScannedZetaSent, err := ob.ObserveZetaSent(ctx, startBlock, toBlock)
-	if err != nil {
-		return errors.Wrap(err, "unable to observe ZetaSent")
-	}
+	wg.Add(1)
+	go func() {
+		defer wg.Done()
+		var err error
+		lastScannedZetaSent, err = ob.ObserveZetaSent(ctx, startBlock, toBlock)
+		if err != nil {
+			ob.Logger().Inbound.Error().
+				Err(err).
+				Msgf("ObserveInbound: error observing zeta sent")
+		}
+	}()
 
 	// task 2: query evm chain for deposited logs (read at most 100 blocks in one go)
-	lastScannedDeposited := ob.ObserveERC20Deposited(ctx, startBlock, toBlock)
+	wg.Add(1)
+	go func() {
+		defer wg.Done()
+		lastScannedDeposited = ob.ObserveERC20Deposited(ctx, startBlock, toBlock)
+	}()
 
-	// task 3: query the incoming tx to TSS address (read at most 100 blocks in one go)
-	lastScannedTssRecvd, err := ob.ObserverTSSReceive(ctx, startBlock, toBlock)
-	if err != nil {
-		return errors.Wrap(err, "unable to observe TSSReceive")
+	// skip slow block scanning actions for ARB, AVAX, and their testnets
+	chainID := ob.Chain().ChainId
+	shouldBlockScan := chainID != chains.ArbitrumMainnet.ChainId &&
+		chainID != chains.ArbitrumSepolia.ChainId &&
+		chainID != chains.AvalancheMainnet.ChainId &&
+		chainID != chains.AvalancheTestnet.ChainId
+
+	if shouldBlockScan {
+		wg.Add(1)
+		go func() {
+			defer wg.Done()
+			var err error
+			// task 3: query the incoming tx to TSS address (read at most 100 blocks in one go)
+			lastScannedTssRecvd, err = ob.ObserverTSSReceive(ctx, startBlock, toBlock)
+			if err != nil {
+				ob.Logger().Inbound.Error().
+					Err(err).
+					Msgf("ObserveInbound: error observe TSSReceive")
+			}
+			// task 4: filter the outbounds from TSS address to supplement outbound trackers
+			// task 3 and task 4 both use the block cache so there little speedup running in parallel
+			// TODO: make this a separate go routine in outbound.go after switching to smart contract V2
+			ob.FilterTSSOutbound(ctx, startBlock, toBlock)
+		}()
 	}
 
-	// task 4: filter the outbounds from TSS address to supplement outbound trackers
-	// TODO: make this a separate go routine in outbound.go after switching to smart contract V2
-	//
-	ob.FilterTSSOutbound(ctx, startBlock, toBlock)
-
 	// query the gateway logs
 	// TODO: refactor in a more declarative design. Example: storing the list of contract and events to listen in an array
 	// https://github.com/zeta-chain/node/issues/2493
-	lastScannedGatewayDeposit, err := ob.ObserveGatewayDeposit(ctx, startBlock, toBlock)
-	if err != nil {
-		ob.Logger().Inbound.Error().
-			Err(err).
-			Msgf("ObserveInbound: error observing deposit events from Gateway contract")
-	}
-	lastScannedGatewayCall, err := ob.ObserveGatewayCall(ctx, startBlock, toBlock)
-	if err != nil {
-		ob.Logger().Inbound.Error().
-			Err(err).
-			Msgf("ObserveInbound: error observing call events from Gateway contract")
-	}
-	lastScannedGatewayDepositAndCall, err := ob.ObserveGatewayDepositAndCall(ctx, startBlock, toBlock)
-	if err != nil {
-		ob.Logger().Inbound.Error().
-			Err(err).
-			Msgf("ObserveInbound: error observing depositAndCall events from Gateway contract")
-	}
+	wg.Add(1)
+	go func() {
+		defer wg.Done()
+		var err error
+		lastScannedGatewayDeposit, err = ob.ObserveGatewayDeposit(ctx, startBlock, toBlock)
+		if err != nil {
+			ob.Logger().Inbound.Error().
+				Err(err).
+				Msgf("ObserveInbound: error observing deposit events from Gateway contract")
+		}
+	}()
+	wg.Add(1)
+	go func() {
+		defer wg.Done()
+		var err error
+		lastScannedGatewayCall, err = ob.ObserveGatewayCall(ctx, startBlock, toBlock)
+		if err != nil {
+			ob.Logger().Inbound.Error().
+				Err(err).
+				Msgf("ObserveInbound: error observing call events from Gateway contract")
+		}
+	}()
+	wg.Add(1)
+	go func() {
+		defer wg.Done()
+		var err error
+		lastScannedGatewayDepositAndCall, err = ob.ObserveGatewayDepositAndCall(ctx, startBlock, toBlock)
+		if err != nil {
+			ob.Logger().Inbound.Error().
+				Err(err).
+				Msgf("ObserveInbound: error observing depositAndCall events from Gateway contract")
+		}
+	}()
+	wg.Wait()
 
 	// note: using the lowest height for all events is not perfect,
 	// but it's simple and good enough
-	lowestLastScannedBlock := slices.Min([]uint64{
+	scannedBlocks := []uint64{
 		lastScannedZetaSent,
 		lastScannedDeposited,
-		lastScannedTssRecvd,
 		lastScannedGatewayDeposit,
 		lastScannedGatewayCall,
 		lastScannedGatewayDepositAndCall,
-	})
+	}
+	// only include lastScannedTssRecvd if it was set
+	if shouldBlockScan {
+		scannedBlocks = append(scannedBlocks, lastScannedTssRecvd)
+	}
+	// calculate the lowest last scanned block
+	lowestLastScannedBlock := slices.Min(scannedBlocks)
+
+	highestLastScannedBlock := slices.Max(scannedBlocks)
+	if highestLastScannedBlock-lowestLastScannedBlock > 10 {
+		ob.Logger().Inbound.Warn().
+			Uint64("observer.last_scanned_lowest", lowestLastScannedBlock).
+			Uint64("observer.highest_scanned_lowest", highestLastScannedBlock).
+			Msg("ObserveInbound: high scanned block delta")
+	}
 
 	// update last scanned block height for all 3 events (ZetaSent, Deposited, TssRecvd), ignore db error
 	if lowestLastScannedBlock > lastScanned {