diff --git a/CHANGELOG.md b/CHANGELOG.md
index 46b7dcf58..dd2117141 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -186,6 +186,7 @@ be used to retrieve the actual proposal `Content`. Also the `NewMsgSubmitProposa
 
 ### Bug Fixes
 
+* (types) [\#7038](https://github.com/cosmos/cosmos-sdk/issues/7038) Fix infinite looping of `ApproxRoot` by including a hard-coded maximum iterations limit of 100.
 * (simulation) [\#7129](https://github.com/cosmos/cosmos-sdk/issues/7129) Fix support for custom `Account` and key types on auth's simulation.
 * (types) [\#7084](https://github.com/cosmos/cosmos-sdk/pull/7084) Fix panic when calling `BigInt()` on an uninitialized `Int`.
 * (x/bank) [\#6536](https://github.com/cosmos/cosmos-sdk/pull/6536) Fix bug in `WriteGeneratedTxResponse` function used by multiple 
diff --git a/types/decimal.go b/types/decimal.go
index a6ef29a03..17b53ac56 100644
--- a/types/decimal.go
+++ b/types/decimal.go
@@ -18,13 +18,16 @@ type Dec struct {
 	i *big.Int
 }
 
-// number of decimal places
 const (
+	// number of decimal places
 	Precision = 18
 
 	// bytes required to represent the above precision
 	// Ceiling[Log2[999 999 999 999 999 999]]
 	DecimalPrecisionBits = 60
+
+	// max number of iterations in ApproxRoot function
+	maxApproxRootIterations = 100
 )
 
 var (
@@ -339,6 +342,8 @@ func (d Dec) QuoInt64(i int64) Dec {
 // using Newton's method (where n is positive). The algorithm starts with some guess and
 // computes the sequence of improved guesses until an answer converges to an
 // approximate answer.  It returns `|d|.ApproxRoot() * -1` if input is negative.
+// A maximum number of 100 iterations is used a backup boundary condition for
+// cases where the answer never converges enough to satisfy the main condition.
 func (d Dec) ApproxRoot(root uint64) (guess Dec, err error) {
 	defer func() {
 		if r := recover(); r != nil {
@@ -366,7 +371,7 @@ func (d Dec) ApproxRoot(root uint64) (guess Dec, err error) {
 	rootInt := NewIntFromUint64(root)
 	guess, delta := OneDec(), OneDec()
 
-	for delta.Abs().GT(SmallestDec()) {
+	for iter := 0; delta.Abs().GT(SmallestDec()) && iter < maxApproxRootIterations; iter++ {
 		prev := guess.Power(root - 1)
 		if prev.IsZero() {
 			prev = SmallestDec()
diff --git a/types/decimal_test.go b/types/decimal_test.go
index dd7c497d8..60f29872f 100644
--- a/types/decimal_test.go
+++ b/types/decimal_test.go
@@ -406,15 +406,22 @@ func TestApproxRoot(t *testing.T) {
 		root     uint64
 		expected Dec
 	}{
-		{OneDec(), 10, OneDec()},                                               // 1.0 ^ (0.1) => 1.0
-		{NewDecWithPrec(25, 2), 2, NewDecWithPrec(5, 1)},                       // 0.25 ^ (0.5) => 0.5
-		{NewDecWithPrec(4, 2), 2, NewDecWithPrec(2, 1)},                        // 0.04 => 0.2
-		{NewDecFromInt(NewInt(27)), 3, NewDecFromInt(NewInt(3))},               // 27 ^ (1/3) => 3
-		{NewDecFromInt(NewInt(-81)), 4, NewDecFromInt(NewInt(-3))},             // -81 ^ (0.25) => -3
-		{NewDecFromInt(NewInt(2)), 2, NewDecWithPrec(1414213562373095049, 18)}, // 2 ^ (0.5) => 1.414213562373095049
-		{NewDecWithPrec(1005, 3), 31536000, MustNewDecFromStr("1.000000000158153904")},
+		{OneDec(), 10, OneDec()},                                                       // 1.0 ^ (0.1) => 1.0
+		{NewDecWithPrec(25, 2), 2, NewDecWithPrec(5, 1)},                               // 0.25 ^ (0.5) => 0.5
+		{NewDecWithPrec(4, 2), 2, NewDecWithPrec(2, 1)},                                // 0.04 ^ (0.5) => 0.2
+		{NewDecFromInt(NewInt(27)), 3, NewDecFromInt(NewInt(3))},                       // 27 ^ (1/3) => 3
+		{NewDecFromInt(NewInt(-81)), 4, NewDecFromInt(NewInt(-3))},                     // -81 ^ (0.25) => -3
+		{NewDecFromInt(NewInt(2)), 2, NewDecWithPrec(1414213562373095049, 18)},         // 2 ^ (0.5) => 1.414213562373095049
+		{NewDecWithPrec(1005, 3), 31536000, MustNewDecFromStr("1.000000000158153904")}, // 1.005 ^ (1/31536000) ≈ 1.00000000016
+		{SmallestDec(), 2, NewDecWithPrec(1, 9)},                                       // 1e-18 ^ (0.5) => 1e-9
+		{SmallestDec(), 3, MustNewDecFromStr("0.000000999999999997")},                  // 1e-18 ^ (1/3) => 1e-6
+		{NewDecWithPrec(1, 8), 3, MustNewDecFromStr("0.002154434690031900")},           // 1e-8 ^ (1/3) ≈ 0.00215443469
 	}
 
+	// In the case of 1e-8 ^ (1/3), the result repeats every 5 iterations starting from iteration 24
+	// (i.e. 24, 29, 34, ... give the same result) and never converges enough. The maximum number of
+	// iterations (100) causes the result at iteration 100 to be returned, regardless of convergence.
+
 	for i, tc := range testCases {
 		res, err := tc.input.ApproxRoot(tc.root)
 		require.NoError(t, err)