diff --git a/dot/state/offline_pruner.go b/dot/state/offline_pruner.go
index 72d400260b9..62ceb7b86cf 100644
--- a/dot/state/offline_pruner.go
+++ b/dot/state/offline_pruner.go
@@ -121,7 +121,7 @@ func (p *OfflinePruner) SetBloomFilter() (err error) {
 			return err
 		}
 
-		trie.PopulateMerkleValues(tr.RootNode(), merkleValues)
+		trie.PopulateNodeHashes(tr.RootNode(), merkleValues)
 
 		// get parent header of current block
 		header, err = p.blockState.GetHeader(header.ParentHash)
diff --git a/lib/trie/database.go b/lib/trie/database.go
index 3018b8872ac..78120867a08 100644
--- a/lib/trie/database.go
+++ b/lib/trie/database.go
@@ -185,20 +185,25 @@ func (t *Trie) loadNode(db Database, n *Node) error {
 	return nil
 }
 
-// PopulateMerkleValues writes the Merkle values of the node given and of
-// all its descendant nodes as keys to the merkleValues map.
+// PopulateNodeHashes writes the node hash values of the node given and of
+// all its descendant nodes as keys to the nodeHashes map.
 // It is assumed the node and its descendant nodes have their Merkle value already
 // computed.
-func PopulateMerkleValues(n *Node, merkleValues map[string]struct{}) {
+func PopulateNodeHashes(n *Node, nodeHashes map[string]struct{}) {
 	if n == nil {
 		return
 	}
 
-	if len(n.MerkleValue) == 0 {
+	switch {
+	case len(n.MerkleValue) == 0:
 		panic(fmt.Sprintf("node with key 0x%x has no Merkle value computed", n.Key))
+	case len(n.MerkleValue) < 32:
+		// Inlined node where its Merkle value is its
+		// encoding and not the encoding hash digest.
+		return
 	}
 
-	merkleValues[string(n.MerkleValue)] = struct{}{}
+	nodeHashes[string(n.MerkleValue)] = struct{}{}
 
 	if n.Kind() == node.Leaf {
 		return
@@ -206,7 +211,7 @@ func PopulateMerkleValues(n *Node, merkleValues map[string]struct{}) {
 
 	branch := n
 	for _, child := range branch.Children {
-		PopulateMerkleValues(child, merkleValues)
+		PopulateNodeHashes(child, nodeHashes)
 	}
 }
 
diff --git a/lib/trie/database_test.go b/lib/trie/database_test.go
index 63a2883d1a9..341eaa2e885 100644
--- a/lib/trie/database_test.go
+++ b/lib/trie/database_test.go
@@ -158,57 +158,77 @@ func Test_Trie_WriteDirty_ClearPrefix(t *testing.T) {
 	assert.Equal(t, trie.String(), trieFromDB.String())
 }
 
-func Test_PopulateMerkleValues(t *testing.T) {
+func Test_PopulateNodeHashes(t *testing.T) {
 	t.Parallel()
 
+	const (
+		merkleValue32Zeroes = "00000000000000000000000000000000"
+		merkleValue32Ones   = "11111111111111111111111111111111"
+		merkleValue32Twos   = "22222222222222222222222222222222"
+		merkleValue32Threes = "33333333333333333333333333333333"
+	)
+
 	testCases := map[string]struct {
-		node         *Node
-		merkleValues map[string]struct{}
-		panicValue   interface{}
+		node       *Node
+		nodeHashes map[string]struct{}
+		panicValue interface{}
 	}{
 		"nil node": {
-			merkleValues: map[string]struct{}{},
+			nodeHashes: map[string]struct{}{},
+		},
+		"inlined leaf node": {
+			node:       &Node{MerkleValue: []byte("a")},
+			nodeHashes: map[string]struct{}{},
 		},
 		"leaf node": {
-			node: &Node{MerkleValue: []byte("a")},
-			merkleValues: map[string]struct{}{
-				"a": {},
+			node: &Node{MerkleValue: []byte(merkleValue32Zeroes)},
+			nodeHashes: map[string]struct{}{
+				merkleValue32Zeroes: {},
 			},
 		},
 		"leaf node without Merkle value": {
 			node:       &Node{Key: []byte{1}, SubValue: []byte{2}},
 			panicValue: "node with key 0x01 has no Merkle value computed",
 		},
-		"branch node": {
+		"inlined branch node": {
 			node: &Node{
 				MerkleValue: []byte("a"),
 				Children: padRightChildren([]*Node{
 					{MerkleValue: []byte("b")},
 				}),
 			},
-			merkleValues: map[string]struct{}{
-				"a": {},
-				"b": {},
+			nodeHashes: map[string]struct{}{},
+		},
+		"branch node": {
+			node: &Node{
+				MerkleValue: []byte(merkleValue32Zeroes),
+				Children: padRightChildren([]*Node{
+					{MerkleValue: []byte(merkleValue32Ones)},
+				}),
+			},
+			nodeHashes: map[string]struct{}{
+				merkleValue32Zeroes: {},
+				merkleValue32Ones:   {},
 			},
 		},
 		"nested branch node": {
 			node: &Node{
-				MerkleValue: []byte("a"),
+				MerkleValue: []byte(merkleValue32Zeroes),
 				Children: padRightChildren([]*Node{
-					{MerkleValue: []byte("b")},
+					{MerkleValue: []byte(merkleValue32Ones)},
 					{
-						MerkleValue: []byte("c"),
+						MerkleValue: []byte(merkleValue32Twos),
 						Children: padRightChildren([]*Node{
-							{MerkleValue: []byte("d")},
+							{MerkleValue: []byte(merkleValue32Threes)},
 						}),
 					},
 				}),
 			},
-			merkleValues: map[string]struct{}{
-				"a": {},
-				"b": {},
-				"c": {},
-				"d": {},
+			nodeHashes: map[string]struct{}{
+				merkleValue32Zeroes: {},
+				merkleValue32Ones:   {},
+				merkleValue32Twos:   {},
+				merkleValue32Threes: {},
 			},
 		},
 	}
@@ -218,18 +238,18 @@ func Test_PopulateMerkleValues(t *testing.T) {
 		t.Run(name, func(t *testing.T) {
 			t.Parallel()
 
-			merkleValues := make(map[string]struct{})
+			nodeHashes := make(map[string]struct{})
 
 			if testCase.panicValue != nil {
 				assert.PanicsWithValue(t, testCase.panicValue, func() {
-					PopulateMerkleValues(testCase.node, merkleValues)
+					PopulateNodeHashes(testCase.node, nodeHashes)
 				})
 				return
 			}
 
-			PopulateMerkleValues(testCase.node, merkleValues)
+			PopulateNodeHashes(testCase.node, nodeHashes)
 
-			assert.Equal(t, testCase.merkleValues, merkleValues)
+			assert.Equal(t, testCase.nodeHashes, nodeHashes)
 		})
 	}
 }