diff --git a/Cargo.lock b/Cargo.lock
index 14ec962..ea55e22 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -631,6 +631,7 @@ dependencies = [
  "rust-embed",
  "rust_decimal",
  "rust_decimal_macros",
+ "semver 1.0.4",
  "serde",
  "serde_json",
  "serde_plain",
@@ -2702,6 +2703,9 @@ name = "semver"
 version = "1.0.4"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "568a8e6258aa33c13358f81fd834adb854c6f7c9468520910a9b1e8fac068012"
+dependencies = [
+ "serde",
+]
 
 [[package]]
 name = "semver-parser"
diff --git a/daemon/Cargo.toml b/daemon/Cargo.toml
index ae9725b..6e025c3 100644
--- a/daemon/Cargo.toml
+++ b/daemon/Cargo.toml
@@ -29,6 +29,7 @@ rocket-basicauth = { version = "2", default-features = false }
 rust-embed = "6.3"
 rust_decimal = "1.18"
 rust_decimal_macros = "1.18"
+semver = { version = "1.0.4", features = ["serde"] }
 serde = { version = "1", features = ["derive"] }
 serde_json = "1"
 serde_plain = "1"
diff --git a/daemon/src/connection.rs b/daemon/src/connection.rs
index 3680d95..dbb45bd 100644
--- a/daemon/src/connection.rs
+++ b/daemon/src/connection.rs
@@ -2,11 +2,11 @@ use crate::address_map::{AddressMap, Stopping};
 use crate::model::cfd::OrderId;
 use crate::model::{Identity, Price, Timestamp, Usd};
 use crate::tokio_ext::FutureExt;
-use crate::wire::EncryptedJsonCodec;
+use crate::wire::{EncryptedJsonCodec, TakerToMaker, Version};
 use crate::{collab_settlement_taker, log_error, noise, send_to_socket, setup_taker, wire, Tasks};
-use anyhow::{Context, Result};
+use anyhow::{bail, Context, Result};
 use bdk::bitcoin::Amount;
-use futures::StreamExt;
+use futures::{SinkExt, StreamExt, TryStreamExt};
 use std::collections::HashMap;
 use std::net::SocketAddr;
 use std::sync::{Arc, Mutex};
@@ -55,7 +55,17 @@ struct MeasurePulse;
 #[derive(Clone, Debug, PartialEq)]
 pub enum ConnectionStatus {
     Online,
-    Offline,
+    Offline {
+        reason: Option<ConnectionCloseReason>,
+    },
+}
+
+#[derive(Clone, Debug, PartialEq)]
+pub enum ConnectionCloseReason {
+    VersionMismatch {
+        taker_version: Version,
+        maker_version: Version,
+    },
 }
 
 /// Message sent from the `setup_taker::Actor` to the
@@ -197,8 +207,51 @@ impl Actor {
             (read, write, Arc::new(Mutex::new(noise)))
         };
 
-        let read = FramedRead::new(read, wire::EncryptedJsonCodec::new(noise.clone()));
-        let write = FramedWrite::new(write, EncryptedJsonCodec::new(noise));
+        let mut read = FramedRead::new(read, wire::EncryptedJsonCodec::new(noise.clone()));
+        let mut write = FramedWrite::new(write, EncryptedJsonCodec::new(noise));
+
+        let our_version = Version::current();
+        write.send(TakerToMaker::Hello(our_version.clone())).await?;
+
+        match read
+            .try_next()
+            .timeout(Duration::from_secs(10))
+            .await
+            .with_context(|| {
+                format!(
+                    "Maker {} did not send Hello within 10 seconds, dropping connection",
+                    maker_identity
+                )
+            })? {
+            Ok(Some(wire::MakerToTaker::Hello(maker_version))) => {
+                if our_version != maker_version {
+                    self.status_sender
+                        .send(ConnectionStatus::Offline {
+                            reason: Some(ConnectionCloseReason::VersionMismatch {
+                                taker_version: our_version.clone(),
+                                maker_version: maker_version.clone(),
+                            }),
+                        })
+                        .expect("receiver to outlive the actor");
+
+                    bail!(
+                        "Network version mismatch, we are on version {} but taker is on version {}",
+                        our_version,
+                        maker_version,
+                    )
+                }
+            }
+            unexpected_message => {
+                bail!(
+                    "Unexpected message {:?} from maker {}",
+                    unexpected_message,
+                    maker_identity
+                )
+            }
+        }
+
+        tracing::info!(address = %maker_addr, "Established connection to maker");
+
         let this = ctx.address().expect("self to be alive");
 
         let send_to_socket = send_to_socket::Actor::new(write);
@@ -219,8 +272,6 @@ impl Actor {
             .send(ConnectionStatus::Online)
             .expect("receiver to outlive the actor");
 
-        tracing::info!(address = %maker_addr, "Established connection to maker");
-
         Ok(())
     }
 
@@ -287,6 +338,9 @@ impl Actor {
                     tracing::warn!(%order_id, "No active collaborative settlement");
                 }
             }
+            wire::MakerToTaker::Hello(_) => {
+                tracing::warn!("Ignoring unexpected Hello message from maker. Hello is only expected when opening a new connection.")
+            }
             other => {
                 // this one should go to the taker cfd actor
                 log_error!(self.maker_to_taker.send(other));
@@ -307,7 +361,7 @@ impl Actor {
 
         if time_since_last_heartbeat > self.heartbeat_timeout {
             self.status_sender
-                .send(ConnectionStatus::Offline)
+                .send(ConnectionStatus::Offline { reason: None })
                 .expect("watch receiver to outlive the actor");
             self.connected_state = None;
         }
@@ -325,7 +379,8 @@ pub async fn connect(
     maker_addresses: Vec<SocketAddr>,
 ) {
     loop {
-        if maker_online_status_feed_receiver.borrow().clone() == ConnectionStatus::Offline {
+        let connection_status = maker_online_status_feed_receiver.borrow().clone();
+        if matches!(connection_status, ConnectionStatus::Offline { .. }) {
             tracing::debug!("No connection to the maker");
             'connect: loop {
                 for address in &maker_addresses {
@@ -339,7 +394,7 @@ pub async fn connect(
                         .await
                         .expect("Taker actor to be present")
                     {
-                        tracing::trace!(%address, "Failed to establish connection: {:#}", e);
+                        tracing::warn!(%address, "Failed to establish connection: {:#}", e);
                         continue;
                     }
                     break 'connect;
diff --git a/daemon/src/lib.rs b/daemon/src/lib.rs
index c036947..566667c 100644
--- a/daemon/src/lib.rs
+++ b/daemon/src/lib.rs
@@ -245,7 +245,7 @@ where
         let cfds = load_all_cfds(&mut conn).await?;
 
         let (maker_online_status_feed_sender, maker_online_status_feed_receiver) =
-            watch::channel(ConnectionStatus::Offline);
+            watch::channel(ConnectionStatus::Offline { reason: None });
 
         let (monitor_addr, mut monitor_ctx) = xtra::Context::new(None);
         let (oracle_addr, mut oracle_ctx) = xtra::Context::new(None);
diff --git a/daemon/src/maker_cfd.rs b/daemon/src/maker_cfd.rs
index 55508d8..863264b 100644
--- a/daemon/src/maker_cfd.rs
+++ b/daemon/src/maker_cfd.rs
@@ -13,6 +13,7 @@ use crate::projection::{
 };
 use crate::setup_contract::RolloverParams;
 use crate::tokio_ext::FutureExt;
+use crate::wire::TakerToMaker;
 use crate::{
     log_error, maker_inc_connections, monitor, oracle, projection, setup_contract, setup_maker,
     wallet, wire, Tasks,
@@ -1109,6 +1110,9 @@ where
             wire::TakerToMaker::Protocol { .. } => {
                 unreachable!("This kind of message should be sent to the `setup_maker::Actor`")
             }
+            TakerToMaker::Hello(_) => {
+                unreachable!("The Hello message is not sent to the cfd actor")
+            }
         }
     }
 }
diff --git a/daemon/src/maker_inc_connections.rs b/daemon/src/maker_inc_connections.rs
index 04dd439..590bfc1 100644
--- a/daemon/src/maker_inc_connections.rs
+++ b/daemon/src/maker_inc_connections.rs
@@ -3,10 +3,11 @@ use crate::maker_cfd::{FromTaker, TakerConnected, TakerDisconnected};
 use crate::model::cfd::{Order, OrderId};
 use crate::model::Identity;
 use crate::noise::TransportStateExt;
-use crate::wire::EncryptedJsonCodec;
+use crate::tokio_ext::FutureExt;
+use crate::wire::{EncryptedJsonCodec, MakerToTaker, TakerToMaker, Version};
 use crate::{maker_cfd, noise, send_to_socket, setup_maker, wire, Tasks};
-use anyhow::Result;
-use futures::TryStreamExt;
+use anyhow::{bail, Context, Result};
+use futures::{SinkExt, TryStreamExt};
 use std::collections::HashMap;
 use std::io;
 use std::net::SocketAddr;
@@ -117,19 +118,54 @@ impl Actor {
         &mut self,
         mut stream: TcpStream,
         taker_address: SocketAddr,
-        ctx: &mut Context<Self>,
+        ctx: &mut xtra::Context<Self>,
     ) -> Result<()> {
         let transport_state = noise::responder_handshake(&mut stream, &self.noise_priv_key).await?;
         let taker_id = Identity::new(transport_state.get_remote_public_key()?);
 
-        tracing::info!(%taker_id, address = %taker_address, "New taker connected");
-
         let transport_state = Arc::new(Mutex::new(transport_state));
 
         let (read, write) = stream.into_split();
         let mut read =
             FramedRead::new(read, wire::EncryptedJsonCodec::new(transport_state.clone()));
-        let write = FramedWrite::new(write, EncryptedJsonCodec::new(transport_state));
+        let mut write = FramedWrite::new(write, EncryptedJsonCodec::new(transport_state));
+
+        match read
+            .try_next()
+            .timeout(Duration::from_secs(10))
+            .await
+            .with_context(|| {
+                format!(
+                    "Taker {} did not send Hello within 10 seconds, dropping connection",
+                    taker_id
+                )
+            })? {
+            Ok(Some(TakerToMaker::Hello(taker_version))) => {
+                let our_version = Version::current();
+                write.send(MakerToTaker::Hello(our_version.clone())).await?;
+
+                if our_version != taker_version {
+                    tracing::debug!(
+                        "Network version mismatch, we are on version {} but taker is on version {}",
+                        our_version,
+                        taker_version
+                    );
+
+                    // A taker running a different version is not treated as error for the maker
+                    return Ok(());
+                }
+            }
+            unexpected_message => {
+                bail!(
+                    "Unexpected message {:?} from taker {}",
+                    unexpected_message,
+                    taker_id
+                );
+            }
+        }
+
+        tracing::info!(%taker_id, address = %taker_address, "New taker connected");
+
         let this = ctx.address().expect("self to be alive");
         let read_fut = async move {
             while let Ok(Some(msg)) = read.try_next().await {
@@ -201,7 +237,7 @@ impl Actor {
         Ok(())
     }
 
-    async fn handle(&mut self, msg: ListenerMessage, ctx: &mut Context<Self>) -> KeepRunning {
+    async fn handle(&mut self, msg: ListenerMessage, ctx: &mut xtra::Context<Self>) -> KeepRunning {
         match msg {
             ListenerMessage::NewConnection { stream, address } => {
                 if let Err(err) = self.handle_new_connection_impl(stream, address, ctx).await {
diff --git a/daemon/src/taker_cfd.rs b/daemon/src/taker_cfd.rs
index 84d9b2b..c78ba00 100644
--- a/daemon/src/taker_cfd.rs
+++ b/daemon/src/taker_cfd.rs
@@ -663,6 +663,9 @@ where
             wire::MakerToTaker::Settlement { .. } => {
                 unreachable!("These messages should be sent to the `collab_settlement::Actor`")
             }
+            wire::MakerToTaker::Hello(_) => {
+                unreachable!("Connection related messages are handled in the connection actor")
+            }
         }
     }
 }
diff --git a/daemon/src/to_sse_event.rs b/daemon/src/to_sse_event.rs
index 7d6875d..add1e92 100644
--- a/daemon/src/to_sse_event.rs
+++ b/daemon/src/to_sse_event.rs
@@ -1,7 +1,7 @@
-use crate::connection::ConnectionStatus;
-use crate::model;
 use crate::model::Timestamp;
 use crate::projection::{Cfd, CfdAction, CfdOrder, Identity, Quote};
+use crate::to_sse_event::ConnectionCloseReason::{MakerVersionOutdated, TakerVersionOutdated};
+use crate::{connection, model};
 use bdk::bitcoin::Amount;
 use rocket::request::FromParam;
 use rocket::response::stream::Event;
@@ -58,11 +58,40 @@ impl ToSseEvent for model::WalletInfo {
     }
 }
 
-impl ToSseEvent for ConnectionStatus {
+#[derive(Debug, Clone, Serialize)]
+pub struct ConnectionStatus {
+    online: bool,
+    connection_close_reason: Option<ConnectionCloseReason>,
+}
+
+#[derive(Debug, Clone, Serialize)]
+pub enum ConnectionCloseReason {
+    MakerVersionOutdated,
+    TakerVersionOutdated,
+}
+
+impl ToSseEvent for connection::ConnectionStatus {
     fn to_sse_event(&self) -> Event {
         let connected = match self {
-            ConnectionStatus::Online => true,
-            ConnectionStatus::Offline => false,
+            connection::ConnectionStatus::Online => ConnectionStatus {
+                online: true,
+                connection_close_reason: None,
+            },
+            connection::ConnectionStatus::Offline { reason } => ConnectionStatus {
+                online: false,
+                connection_close_reason: reason.as_ref().map(|g| match g {
+                    connection::ConnectionCloseReason::VersionMismatch {
+                        maker_version,
+                        taker_version,
+                    } => {
+                        if *maker_version < *taker_version {
+                            MakerVersionOutdated
+                        } else {
+                            TakerVersionOutdated
+                        }
+                    }
+                }),
+            },
         };
 
         Event::json(&connected).event("maker_status")
diff --git a/daemon/src/wire.rs b/daemon/src/wire.rs
index b958df0..1595f56 100644
--- a/daemon/src/wire.rs
+++ b/daemon/src/wire.rs
@@ -18,6 +18,21 @@ use std::ops::RangeInclusive;
 use std::sync::{Arc, Mutex};
 use tokio_util::codec::{Decoder, Encoder, LengthDelimitedCodec};
 
+#[derive(Debug, Clone, Serialize, Deserialize, Eq, PartialEq, PartialOrd)]
+pub struct Version(semver::Version);
+
+impl Version {
+    pub fn current() -> Self {
+        Self(semver::Version::new(1, 0, 0))
+    }
+}
+
+impl fmt::Display for Version {
+    fn fmt(&self, f: &mut fmt::Formatter<'_>) -> fmt::Result {
+        self.0.fmt(f)
+    }
+}
+
 pub mod taker_to_maker {
     use super::*;
 
@@ -43,6 +58,7 @@ pub mod taker_to_maker {
 #[serde(tag = "type", content = "payload")]
 #[allow(clippy::large_enum_variant)]
 pub enum TakerToMaker {
+    Hello(Version),
     TakeOrder {
         order_id: OrderId,
         quantity: Usd,
@@ -70,6 +86,7 @@ impl fmt::Display for TakerToMaker {
             TakerToMaker::ProposeRollOver { .. } => write!(f, "ProposeRollOver"),
             TakerToMaker::RollOverProtocol(_) => write!(f, "RollOverProtocol"),
             TakerToMaker::Settlement { .. } => write!(f, "Settlement"),
+            TakerToMaker::Hello(_) => write!(f, "Hello"),
         }
     }
 }
@@ -78,6 +95,7 @@ impl fmt::Display for TakerToMaker {
 #[serde(tag = "type", content = "payload")]
 #[allow(clippy::large_enum_variant)]
 pub enum MakerToTaker {
+    Hello(Version),
     /// Periodically broadcasted message, indicating maker's presence
     Heartbeat,
     CurrentOrder(Option<Order>),
@@ -114,6 +132,7 @@ pub mod maker_to_taker {
 impl fmt::Display for MakerToTaker {
     fn fmt(&self, f: &mut fmt::Formatter<'_>) -> fmt::Result {
         match self {
+            MakerToTaker::Hello(_) => write!(f, "Hello"),
             MakerToTaker::Heartbeat { .. } => write!(f, "Heartbeat"),
             MakerToTaker::CurrentOrder(_) => write!(f, "CurrentOrder"),
             MakerToTaker::ConfirmOrder(_) => write!(f, "ConfirmOrder"),
diff --git a/daemon/tests/happy_path.rs b/daemon/tests/happy_path.rs
index c80a29f..0b2732a 100644
--- a/daemon/tests/happy_path.rs
+++ b/daemon/tests/happy_path.rs
@@ -189,7 +189,7 @@ async fn taker_notices_lack_of_maker() {
     sleep(taker_config.heartbeat_timeout).await;
 
     assert_eq!(
-        ConnectionStatus::Offline,
+        ConnectionStatus::Offline { reason: None },
         next(taker.maker_status_feed()).await.unwrap(),
     );
 
diff --git a/taker-frontend/src/App.tsx b/taker-frontend/src/App.tsx
index afe2962..18a86b8 100644
--- a/taker-frontend/src/App.tsx
+++ b/taker-frontend/src/App.tsx
@@ -25,6 +25,7 @@ import {
     BXBTData,
     Cfd,
     CfdOrderRequestPayload,
+    ConnectionStatus,
     intoCfd,
     intoOrder,
     MarginRequestPayload,
@@ -63,8 +64,8 @@ export const App = () => {
     const cfdsOrUndefined = useLatestEvent<Cfd[]>(source, "cfds", intoCfd);
     let cfds = cfdsOrUndefined ? cfdsOrUndefined! : [];
     cfds.sort((a, b) => a.order_id.localeCompare(b.order_id));
-    const connectedToMakerOrUndefined = useLatestEvent<boolean>(source, "maker_status");
-    const connectedToMaker = connectedToMakerOrUndefined ? connectedToMakerOrUndefined! : false;
+    const connectedToMakerOrUndefined = useLatestEvent<ConnectionStatus>(source, "maker_status");
+    const connectedToMaker = connectedToMakerOrUndefined ? connectedToMakerOrUndefined : { online: false };
 
     let [quantity, setQuantity] = useState("0");
     let [margin, setMargin] = useState(0);
@@ -154,7 +155,7 @@ export const App = () => {
                                                 cfds={cfds.filter((cfd) =>
                                                     cfd.state.getGroup() === StateGroupKey.CLOSED
                                                 )}
-                                                connectedToMaker
+                                                connectedToMaker={connectedToMaker}
                                             />
                                         </AccordionPanel>
                                     </AccordionItem>
diff --git a/taker-frontend/src/components/History.tsx b/taker-frontend/src/components/History.tsx
index 9ee2eca..af2f2fb 100644
--- a/taker-frontend/src/components/History.tsx
+++ b/taker-frontend/src/components/History.tsx
@@ -18,14 +18,14 @@ import {
     VStack,
 } from "@chakra-ui/react";
 import * as React from "react";
-import { Cfd, Tx, TxLabel } from "../types";
+import { Cfd, ConnectionStatus, Tx, TxLabel } from "../types";
 import usePostRequest from "../usePostRequest";
 import CloseButton from "./CloseButton";
 
 interface HistoryProps {
     cfds: Cfd[];
     title?: string;
-    connectedToMaker: Boolean;
+    connectedToMaker: ConnectionStatus;
 }
 
 const History = ({ cfds, title, connectedToMaker }: HistoryProps) => {
@@ -51,7 +51,7 @@ export default History;
 
 interface CfdDetailsProps {
     cfd: Cfd;
-    connectedToMaker: Boolean;
+    connectedToMaker: ConnectionStatus;
 }
 
 const CfdDetails = ({ cfd, connectedToMaker }: CfdDetailsProps) => {
@@ -74,7 +74,7 @@ const CfdDetails = ({ cfd, connectedToMaker }: CfdDetailsProps) => {
     let [settle, isSettling] = usePostRequest(`/api/cfd/${cfd.order_id}/settle`);
     let [commit, isCommiting] = usePostRequest(`/api/cfd/${cfd.order_id}/commit`);
 
-    const closeButton = connectedToMaker
+    const closeButton = connectedToMaker.online
         ? <CloseButton request={settle} status={isSettling} cfd={cfd} action="Close" />
         : <CloseButton request={commit} status={isCommiting} cfd={cfd} action="Force Close" />;
 
diff --git a/taker-frontend/src/components/NavBar.tsx b/taker-frontend/src/components/NavBar.tsx
index 437b44f..460db6b 100644
--- a/taker-frontend/src/components/NavBar.tsx
+++ b/taker-frontend/src/components/NavBar.tsx
@@ -17,11 +17,11 @@ import * as React from "react";
 import { useNavigate } from "react-router-dom";
 import logoBlack from "../images/logo_nav_bar_black.svg";
 import logoWhite from "../images/logo_nav_bar_white.svg";
-import { WalletInfo } from "../types";
+import { ConnectionCloseReason, ConnectionStatus, WalletInfo } from "../types";
 
 interface NavProps {
     walletInfo: WalletInfo | null;
-    connectedToMaker: boolean;
+    connectedToMaker: ConnectionStatus;
 }
 
 export default function Nav({ walletInfo, connectedToMaker }: NavProps) {
@@ -38,6 +38,18 @@ export default function Nav({ walletInfo, connectedToMaker }: NavProps) {
         <SunIcon />,
     );
 
+    let connectionMessage = connectedToMaker.online ? "Online" : "Offline";
+    if (connectedToMaker.connection_close_reason) {
+        switch (connectedToMaker.connection_close_reason) {
+            case ConnectionCloseReason.MAKER_VERSION_OUTDATED:
+                connectionMessage = connectionMessage + ": the maker is running an outdated version";
+                break;
+            case ConnectionCloseReason.TAKER_VERSION_OUTDATED:
+                connectionMessage = connectionMessage + " - you are running an incompatible version, please upgrade!";
+                break;
+        }
+    }
+
     return (
         <>
             <Box bg={useColorModeValue("gray.100", "gray.900")} px={4}>
@@ -56,7 +68,7 @@ export default function Nav({ walletInfo, connectedToMaker }: NavProps) {
                             <MenuItem onClick={() => navigate("/wallet")}>Wallet</MenuItem>
                         </MenuList>
                     </Menu>
-                    <Heading size={"sm"}>{"Maker status: " + (connectedToMaker ? "Online" : "Offline")}</Heading>
+                    <Heading size={"sm"}>{"Maker status: " + connectionMessage}</Heading>
                     <Flex alignItems={"center"}>
                         <Stack direction={"row"} spacing={7}>
                             <Button onClick={toggleColorMode} bg={"transparent"}>
diff --git a/taker-frontend/src/components/Trade.tsx b/taker-frontend/src/components/Trade.tsx
index 3900364..9373fa7 100644
--- a/taker-frontend/src/components/Trade.tsx
+++ b/taker-frontend/src/components/Trade.tsx
@@ -47,12 +47,12 @@ import {
 } from "@chakra-ui/react";
 import { motion } from "framer-motion";
 import * as React from "react";
-import { CfdOrderRequestPayload } from "../types";
+import { CfdOrderRequestPayload, ConnectionStatus } from "../types";
 
 const MotionBox = motion<BoxProps>(Box);
 
 interface TradeProps {
-    connectedToMaker: boolean;
+    connectedToMaker: ConnectionStatus;
     orderId?: string;
     minQuantity: number;
     maxQuantity: number;
@@ -120,7 +120,7 @@ export default function Trade({
 
     let alertBox;
 
-    if (!connectedToMaker) {
+    if (!connectedToMaker.online) {
         alertBox = <AlertBox
             title={"No maker!"}
             description={"You are not connected to any maker. Functionality may be limited"}
diff --git a/taker-frontend/src/types.ts b/taker-frontend/src/types.ts
index 7b158af..ca67554 100644
--- a/taker-frontend/src/types.ts
+++ b/taker-frontend/src/types.ts
@@ -277,3 +277,13 @@ export interface WithdrawRequest {
     amount?: number;
     fee: number;
 }
+
+export interface ConnectionStatus {
+    online: boolean;
+    connection_close_reason?: ConnectionCloseReason;
+}
+
+export const enum ConnectionCloseReason {
+    MAKER_VERSION_OUTDATED = "MakerVersionOutdated",
+    TAKER_VERSION_OUTDATED = "TakerVersionOutdated",
+}