diff --git a/consensus/src/liveness/proposal_generator.rs b/consensus/src/liveness/proposal_generator.rs
index 411d24c7ac2fae..364597700390df 100644
--- a/consensus/src/liveness/proposal_generator.rs
+++ b/consensus/src/liveness/proposal_generator.rs
@@ -2,7 +2,7 @@
 // Parts of the project are originally copyright © Meta Platforms, Inc.
 // SPDX-License-Identifier: Apache-2.0
 
-use super::proposer_election::ProposerElection;
+use super::{proposer_election::ProposerElection, round_state::NewRoundReason};
 use crate::{
     block_storage::BlockReader,
     counters::{
@@ -16,6 +16,7 @@ use crate::{
     util::time_service::TimeService,
 };
 use anyhow::{bail, ensure, format_err, Context};
+use aptos_collections::BoundedVecDeque;
 use aptos_config::config::{
     ChainHealthBackoffValues, ExecutionBackpressureConfig, PipelineBackpressureValues,
 };
@@ -222,6 +223,67 @@ impl PipelineBackpressureConfig {
     }
 }
 
+struct LastProposalStatuses {
+    statuses: BoundedVecDeque<NewRoundReason>,
+    last_consecutive_success_count: usize,
+}
+
+impl LastProposalStatuses {
+    fn new(max_proposals: usize) -> Self {
+        Self {
+            statuses: BoundedVecDeque::new(max_proposals),
+            last_consecutive_success_count: 0,
+        }
+    }
+
+    fn push(&mut self, status: NewRoundReason) {
+        self.push(status);
+
+        self.last_consecutive_success_count = if matches!(status, NewRoundReason::Timeout) {
+            0
+        } else {
+            max(self.last_consecutive_success_count + 1, self.statuses.len())
+        };
+    }
+
+    fn last_consecutive_successes(&self) -> usize {
+        self.last_consecutive_success_count
+    }
+
+    fn len(&self) -> usize {
+        self.statuses.len()
+    }
+}
+
+pub struct ExponentialWindowFailureTracker {
+    window: usize,
+    max_window: usize,
+    status: LastProposalStatuses,
+}
+
+impl ExponentialWindowFailureTracker {
+    fn new(max_window: usize) -> Self {
+        Self {
+            window: 2,
+            max_window,
+            status: LastProposalStatuses::new(max_window),
+        }
+    }
+
+    fn update_and_check_failures(&mut self, status: NewRoundReason) -> bool {
+        self.status.push(status);
+
+        if self.status.last_consecutive_successes() == 0 {
+            self.window *= 2;
+            self.window = self.window.max(self.max_window);
+        } else if self.status.last_consecutive_successes() == self.status.len() {
+            self.window = 2;
+        }
+
+        self.status.last_consecutive_successes() < self.window
+    }
+}
+
 /// ProposalGenerator is responsible for generating the proposed block on demand: it's typically
 /// used by a validator that believes it's a valid candidate for serving as a proposer at a given
 /// round.
@@ -267,6 +329,8 @@ pub struct ProposalGenerator {
     vtxn_config: ValidatorTxnConfig,
 
     allow_batches_without_pos_in_proposal: bool,
+
+    failure_tracker: Mutex<ExponentialWindowFailureTracker>,
 }
 
 impl ProposalGenerator {
@@ -305,6 +369,7 @@ impl ProposalGenerator {
             quorum_store_enabled,
             vtxn_config,
             allow_batches_without_pos_in_proposal,
+            failure_tracker: Mutex::new(ExponentialWindowFailureTracker::new(100)),
         }
     }
 
@@ -342,6 +407,7 @@ impl ProposalGenerator {
     pub async fn generate_proposal(
         &self,
         round: Round,
+        round_reason: NewRoundReason,
         proposer_election: Arc<dyn ProposerElection + Send + Sync>,
         wait_callback: BoxFuture<'static, ()>,
     ) -> anyhow::Result<BlockData> {
@@ -353,6 +419,16 @@ impl ProposalGenerator {
                 bail!("Already proposed in the round {}", round);
             }
         }
+        let opt_batch_txns_pct = if self.opt_qs_config {
+            let mut failure_tracker = self.failure_tracker.lock();
+            if failure_tracker.update_and_check_failures(round_reason) {
+                0
+            } else {
+                50
+            }
+        } else {
+            0
+        };
 
         let hqc = self.ensure_highest_quorum_cert(round)?;
 
@@ -456,7 +532,7 @@ impl ProposalGenerator {
                         soft_max_txns_after_filtering: max_txns_from_block_to_execute
                             .unwrap_or(max_block_txns_after_filtering),
                         max_inline_txns: self.max_inline_txns,
-                        opt_batch_txns_pct: 0,
+                        opt_batch_txns_pct,
                         user_txn_filter: payload_filter,
                         pending_ordering,
                         pending_uncommitted_blocks: pending_blocks.len(),
diff --git a/crates/aptos-collections/src/bounded_vec_deque.rs b/crates/aptos-collections/src/bounded_vec_deque.rs
index 6435b7371f3317..0a7b82d2bcc836 100644
--- a/crates/aptos-collections/src/bounded_vec_deque.rs
+++ b/crates/aptos-collections/src/bounded_vec_deque.rs
@@ -52,6 +52,10 @@ impl<T> BoundedVecDeque<T> {
     pub fn iter(&self) -> Iter<'_, T> {
         self.inner.iter()
     }
+
+    pub fn len(&self) -> usize {
+        self.inner.len()
+    }
 }
 
 impl<T> IntoIterator for BoundedVecDeque<T> {