diff --git a/packages/monitor-v2/src/bot-oo/index.ts b/packages/monitor-v2/src/bot-oo/index.ts
index 1906b64914..965a757ca7 100644
--- a/packages/monitor-v2/src/bot-oo/index.ts
+++ b/packages/monitor-v2/src/bot-oo/index.ts
@@ -1,8 +1,132 @@
 import { delay, waitForLogger, GasEstimator } from "@uma/financial-templates-lib";
-import { BotModes, initMonitoringParams, Logger, startupLogLevel } from "./common";
+import { BigNumber } from "ethers";
+import { BotModes, MonitoringParams, initMonitoringParams, Logger, startupLogLevel } from "./common";
 import { settleRequests } from "./SettleRequests";
 
 const logger = Logger;
+const DEFAULT_REPLACEMENT_BUMP_NUMERATOR = 12;
+const DEFAULT_REPLACEMENT_BUMP_DENOMINATOR = 10;
+const DEFAULT_REPLACEMENT_ATTEMPTS = 3;
+
+type NonceBacklogConfig = {
+  replacementBumpNumerator: number;
+  replacementBumpDenominator: number;
+  replacementAttempts: number;
+};
+
+const parsePositiveInt = (value: string | undefined, defaultValue: number): number => {
+  const parsed = Number(value);
+  return Number.isFinite(parsed) && parsed > 0 ? Math.floor(parsed) : defaultValue;
+};
+
+const getNonceBacklogConfig = (env: NodeJS.ProcessEnv): NonceBacklogConfig => ({
+  replacementBumpNumerator: parsePositiveInt(env.NONCE_REPLACEMENT_BUMP_NUMERATOR, DEFAULT_REPLACEMENT_BUMP_NUMERATOR),
+  replacementBumpDenominator: parsePositiveInt(
+    env.NONCE_REPLACEMENT_BUMP_DENOMINATOR,
+    DEFAULT_REPLACEMENT_BUMP_DENOMINATOR
+  ),
+  replacementAttempts: parsePositiveInt(env.NONCE_REPLACEMENT_ATTEMPTS, DEFAULT_REPLACEMENT_ATTEMPTS),
+});
+
+function bumpFeeData(
+  feeData: ReturnType<GasEstimator["getCurrentFastPriceEthers"]>,
+  bumps: number,
+  config: NonceBacklogConfig
+): ReturnType<GasEstimator["getCurrentFastPriceEthers"]> {
+  if (bumps === 0) return feeData;
+
+  const bumpValue = (value: BigNumber) => {
+    let bumped = value;
+    for (let i = 0; i < bumps; i++) {
+      bumped = bumped.mul(config.replacementBumpNumerator).div(config.replacementBumpDenominator);
+    }
+    return bumped;
+  };
+
+  if ("gasPrice" in feeData) {
+    return { gasPrice: bumpValue(feeData.gasPrice) };
+  }
+
+  return {
+    maxFeePerGas: bumpValue(feeData.maxFeePerGas),
+    maxPriorityFeePerGas: bumpValue(feeData.maxPriorityFeePerGas),
+  };
+}
+
+async function handleNonceBacklog(
+  params: MonitoringParams,
+  gasEstimator: GasEstimator,
+  config: NonceBacklogConfig
+): Promise<boolean> {
+  const botAddress = await params.signer.getAddress();
+  const [latestNonce, pendingNonce] = await Promise.all([
+    params.provider.getTransactionCount(botAddress, "latest"),
+    params.provider.getTransactionCount(botAddress, "pending"),
+  ]);
+
+  if (pendingNonce <= latestNonce) return false;
+
+  logger.warn({
+    at: "OracleBot",
+    message: "Nonce backlog detected, skipping settlements for this run",
+    botAddress,
+    latestNonce,
+    pendingNonce,
+  });
+
+  await gasEstimator.update();
+  const baseFeeData = gasEstimator.getCurrentFastPriceEthers();
+
+  for (let attempt = 1; attempt <= config.replacementAttempts; attempt++) {
+    const feeData = bumpFeeData(baseFeeData, attempt - 1, config);
+    try {
+      const tx = await params.signer.sendTransaction({
+        to: botAddress,
+        value: 0,
+        nonce: latestNonce,
+        gasLimit: 21_000,
+        ...feeData,
+      });
+
+      logger.info({
+        at: "OracleBot",
+        message: "Submitted nonce backlog cancellation transaction",
+        tx: tx.hash,
+        nonce: latestNonce,
+        attempt,
+        feeData,
+      });
+
+      await tx.wait(1);
+
+      logger.info({
+        at: "OracleBot",
+        message: "Nonce backlog cancellation transaction mined",
+        tx: tx.hash,
+        nonce: latestNonce,
+        attempt,
+      });
+      return true;
+    } catch (error) {
+      logger.warn({
+        at: "OracleBot",
+        message: "Nonce backlog cancellation transaction failed",
+        attempt,
+        nonce: latestNonce,
+        error,
+      });
+    }
+  }
+
+  logger.error({
+    at: "OracleBot",
+    message: "Failed to clear nonce backlog, exiting early",
+    nonce: latestNonce,
+    pendingNonce,
+  });
+
+  return true;
+}
 
 async function main() {
   const params = await initMonitoringParams(process.env);
@@ -16,12 +140,20 @@ async function main() {
   });
 
   const gasEstimator = new GasEstimator(logger, undefined, params.chainId, params.provider);
+  const nonceBacklogConfig = getNonceBacklogConfig(process.env);
 
   const cmds = {
     settleRequestsEnabled: settleRequests,
   };
 
   for (;;) {
+    const backlogDetected = await handleNonceBacklog(params, gasEstimator, nonceBacklogConfig);
+    if (backlogDetected) {
+      await delay(5); // Let any in-flight logs flush before exiting.
+      await waitForLogger(logger);
+      break;
+    }
+
     await gasEstimator.update();
 
     const runCmds = Object.entries(cmds)