diff --git a/relayer/pkg/chainlink/ocr2/medianreport/report.go b/relayer/pkg/chainlink/ocr2/medianreport/report.go
index 187403d8..ffb7364b 100644
--- a/relayer/pkg/chainlink/ocr2/medianreport/report.go
+++ b/relayer/pkg/chainlink/ocr2/medianreport/report.go
@@ -8,6 +8,7 @@ import (
 	"sort"
 
 	"github.com/NethermindEth/juno/core/felt"
+	"github.com/NethermindEth/starknet.go/curve"
 	starknetutils "github.com/NethermindEth/starknet.go/utils"
 
 	"github.com/smartcontractkit/libocr/offchainreporting2/reportingplugin/median"
@@ -74,13 +75,24 @@ func (c ReportCodec) BuildReport(oo []median.ParsedAttributedObservation) (types
 
 	var observers = make([]byte, starknet.FeltLength)
 	var observations []*felt.Felt
+
+	observers[0] = uint8(1)
 	for i, o := range oo {
-		observers[i] = byte(o.Observer)
+		// encoding scheme is offset by 0x01-padded to avoid felt overflow
+		// [0x01, <1_ID>, <2_ID>, ..., <N_ID>, 0x0, 0x0, ..., 0x0]
+		// note: this does not alter Starknet's MAX_ORACLES (31)
+		// where N is the length of the observations array
+		observers[i+1] = byte(o.Observer)
 
 		f := starknetutils.BigIntToFelt(o.Value)
 		observations = append(observations, f)
 	}
 
+	observersBig := starknetutils.BytesToBig(observers)
+	if observersBig.Cmp(curve.Curve.P) != -1 {
+		return nil, fmt.Errorf("invalid observers value: %v is larger than size of finite field", observersBig)
+	}
+
 	var report []byte
 
 	buf := timestampFelt.Bytes()
diff --git a/relayer/pkg/chainlink/ocr2/medianreport/report_test.go b/relayer/pkg/chainlink/ocr2/medianreport/report_test.go
index 3c92b112..9bef6615 100644
--- a/relayer/pkg/chainlink/ocr2/medianreport/report_test.go
+++ b/relayer/pkg/chainlink/ocr2/medianreport/report_test.go
@@ -6,6 +6,8 @@ import (
 	"testing"
 	"time"
 
+	"github.com/NethermindEth/starknet.go/curve"
+	starknetutils "github.com/NethermindEth/starknet.go/utils"
 	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
 
@@ -53,6 +55,35 @@ func TestBuildReportWithNegativeValues(t *testing.T) {
 	assert.ErrorContains(t, err, "starknet does not support negative values: value = (10), fee = (10), gas = (-10)")
 }
 
+func TestBuildReportNoObserversOverflow(t *testing.T) {
+	c := ReportCodec{}
+	oo := []median.ParsedAttributedObservation{}
+	fmt.Println("hello")
+	v := big.NewInt(0)
+	v.SetString("1000000000000000000", 10)
+
+	// test largest possible encoded observers byte array
+	for i := 30; i >= 0; i-- {
+		oo = append(oo, median.ParsedAttributedObservation{
+			Timestamp:        uint32(time.Now().Unix()),
+			Value:            big.NewInt(1234567890),
+			GasPriceSubunits: big.NewInt(2),
+			JuelsPerFeeCoin:  v,
+			Observer:         commontypes.OracleID(i),
+		})
+	}
+
+	report, err := c.BuildReport(oo)
+	assert.Nil(t, err)
+
+	index := timestampSizeBytes
+	observersBytes := []byte(report[index : index+observersSizeBytes])
+	observersBig := starknetutils.BytesToBig(observersBytes)
+
+	// encoded observers felt is less than max felt
+	assert.Equal(t, -1, observersBig.Cmp(curve.Curve.P), "observers should be less than max felt")
+}
+
 func TestBuildReport(t *testing.T) {
 	c := ReportCodec{}
 	oo := []median.ParsedAttributedObservation{}
@@ -63,6 +94,8 @@ func TestBuildReport(t *testing.T) {
 	v := big.NewInt(0)
 	v.SetString("1000000000000000000", 10)
 
+	// 0x01 pad the first byte
+	observers[0] = uint8(1)
 	for i := 0; i < n; i++ {
 		oo = append(oo, median.ParsedAttributedObservation{
 			Timestamp:        uint32(time.Now().Unix()),
@@ -73,7 +106,8 @@ func TestBuildReport(t *testing.T) {
 		})
 
 		// create expected outputs
-		observers[i] = uint8(i)
+		// remember to add 1 byte offset to avoid felt overflow
+		observers[i+1] = uint8(i)
 	}
 
 	report, err := c.BuildReport(oo)