diff --git a/substrate/build.sh b/substrate/build.sh
new file mode 100755
index 0000000000..40a1043226
--- /dev/null
+++ b/substrate/build.sh
@@ -0,0 +1,6 @@
+#!/bin/sh
+
+cd wasm-runtime
+./build.sh
+cd ..
+
diff --git a/substrate/executor/src/lib.rs b/substrate/executor/src/lib.rs
index 17b1ec9025..9bea6958de 100644
--- a/substrate/executor/src/lib.rs
+++ b/substrate/executor/src/lib.rs
@@ -34,7 +34,6 @@ extern crate serde;
 extern crate parity_wasm;
 extern crate byteorder;
 extern crate rustc_hex;
-#[macro_use]
 extern crate native_runtime;
 extern crate runtime_support;
 extern crate memcmp;
@@ -53,8 +52,6 @@ mod native_executor;
 pub mod error;
 
 /// Creates new RustExecutor for contracts.
-pub fn executor() -> wasm_executor::WasmExecutor {
-	// TODO: check what the code to execute is and use NativeExecutor if the wasm is compiled with
-	// matches.
-	wasm_executor::WasmExecutor::default()
+pub fn executor() -> native_executor::NativeExecutor {
+	native_executor::NativeExecutor
 }
diff --git a/substrate/executor/src/native_executor.rs b/substrate/executor/src/native_executor.rs
index 14e08f8e80..79e6af2ea9 100644
--- a/substrate/executor/src/native_executor.rs
+++ b/substrate/executor/src/native_executor.rs
@@ -6,7 +6,7 @@ use wasm_executor::WasmExecutor;
 use native_runtime as runtime;
 use runtime_support;
 
-struct NativeExecutor;
+pub struct NativeExecutor;
 
 impl CodeExecutor for NativeExecutor {
 	type Error = Error;
@@ -46,7 +46,31 @@ mod tests {
 	fn tx() -> Vec<u8> { "679fcf0a846b4224c84ecad7d91a26241c46d00cb53d6480a363274e8965ee34b0b80b4b2e3836d3d8f8f12c0c1aef7350af587d9aee3883561d11726068ac0a2f8c6129d816cf51c374bc7f08c3e63ed156cf78aefb4a6550d97b87997977ee00000000000000000228000000d75a980182b10ab7d54bfed3c964073a0ee172f3daa62325af021a68f707511a4500000000000000".convert() }
 
 	#[test]
-	fn execution_with_native_equivalent_code_runs_native_ok() {
+	fn panic_execution_with_foreign_code_gives_error() {
+		let one = one();
+		let mut t = TestExternalities { storage: map![
+			twox_128(&one.to_keyed_vec(b"sta:bal:")).to_vec() => vec![68u8, 0, 0, 0, 0, 0, 0, 0]
+		], };
+
+		let foreign_code = include_bytes!("../../wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.wasm");
+		let r = NativeExecutor.call(&mut t, &foreign_code[..], "execute_transaction", &CallData(tx()));
+		assert!(r.is_err());
+	}
+
+	#[test]
+	fn panic_execution_with_native_equivalent_code_gives_error() {
+		let one = one();
+		let mut t = TestExternalities { storage: map![
+			twox_128(&one.to_keyed_vec(b"sta:bal:")).to_vec() => vec![68u8, 0, 0, 0, 0, 0, 0, 0]
+		], };
+
+		let native_equivalent_code = include_bytes!("../../wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.compact.wasm");
+		let r = NativeExecutor.call(&mut t, &native_equivalent_code[..], "execute_transaction", &CallData(tx()));
+		assert!(r.is_err());
+	}
+
+	#[test]
+	fn successful_execution_with_native_equivalent_code_gives_ok() {
 		let one = one();
 		let two = two();
 
@@ -55,7 +79,8 @@ mod tests {
 		], };
 
 		let native_equivalent_code = include_bytes!("../../wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.compact.wasm");
-		NativeExecutor.call(&mut t, &native_equivalent_code[..], "execute_transaction", &CallData(tx()));
+		let r = NativeExecutor.call(&mut t, &native_equivalent_code[..], "execute_transaction", &CallData(tx()));
+		assert!(r.is_ok());
 
 		runtime_support::with_externalities(&mut t, || {
 			assert_eq!(balance(&one), 42);
@@ -64,7 +89,7 @@ mod tests {
 	}
 
 	#[test]
-	fn execution_with_foreign_code_runs_wasm_ok() {
+	fn successful_execution_with_foreign_code_gives_ok() {
 		let one = one();
 		let two = two();
 
@@ -72,14 +97,14 @@ mod tests {
 			twox_128(&one.to_keyed_vec(b"sta:bal:")).to_vec() => vec![111u8, 0, 0, 0, 0, 0, 0, 0]
 		], };
 
-		let mut foreign_code = include_bytes!("../../wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.wasm");
-		NativeExecutor.call(&mut t, &foreign_code[..], "execute_transaction", &CallData(tx()));
+		let foreign_code = include_bytes!("../../wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.wasm");
+		let r = NativeExecutor.call(&mut t, &foreign_code[..], "execute_transaction", &CallData(tx()));
+		println!("{:?}", r);
+		assert!(r.is_ok());
 
 		runtime_support::with_externalities(&mut t, || {
 			assert_eq!(balance(&one), 42);
 			assert_eq!(balance(&two), 69);
 		});
 	}
-
-	// TODO: test panics.
 }
diff --git a/substrate/executor/src/wasm_executor.rs b/substrate/executor/src/wasm_executor.rs
index f7d922d6fb..05cb5580eb 100644
--- a/substrate/executor/src/wasm_executor.rs
+++ b/substrate/executor/src/wasm_executor.rs
@@ -234,7 +234,9 @@ impl CodeExecutor for WasmExecutor {
 					.add_argument(I32(offset as i32))
 					.add_argument(I32(size as i32)))
 			.and_then(|p| module.execute_export(method, p))
-			.map_err(|_| -> Error { ErrorKind::Runtime.into() })?;
+			.map_err(|_| -> Error {
+				ErrorKind::Runtime.into()
+			})?;
 
 		if let Some(I64(r)) = returned {
 			memory.get(r as u32, (r >> 32) as u32 as usize)
@@ -250,8 +252,28 @@ mod tests {
 
 	use super::*;
 	use rustc_hex::FromHex;
-	use state_machine::ExternalitiesError;
-	use native_runtime::testing::{TestExternalities, one, two};
+	use native_runtime::testing::TestExternalities;
+
+	#[test]
+	fn returning_should_work() {
+		let mut ext = TestExternalities::default();
+		let test_code = include_bytes!("../../wasm-runtime/target/wasm32-unknown-unknown/release/runtime_test.compact.wasm");
+
+		let output = WasmExecutor.call(&mut ext, &test_code[..], "test_empty_return", &CallData(vec![])).unwrap();
+		assert_eq!(output, vec![0u8; 0]);
+	}
+
+	#[test]
+	fn panicking_should_work() {
+		let mut ext = TestExternalities::default();
+		let test_code = include_bytes!("../../wasm-runtime/target/wasm32-unknown-unknown/release/runtime_test.compact.wasm");
+
+		let output = WasmExecutor.call(&mut ext, &test_code[..], "test_panic", &CallData(vec![]));
+		assert!(output.is_err());
+
+		let output = WasmExecutor.call(&mut ext, &test_code[..], "test_conditional_panic", &CallData(vec![2]));
+		assert!(output.is_err());
+	}
 
 	#[test]
 	fn storage_should_work() {
diff --git a/substrate/wasm-runtime/polkadot/src/lib.rs b/substrate/wasm-runtime/polkadot/src/lib.rs
index 1134d974a7..c03fcc83c5 100644
--- a/substrate/wasm-runtime/polkadot/src/lib.rs
+++ b/substrate/wasm-runtime/polkadot/src/lib.rs
@@ -38,12 +38,6 @@ use runtime_support::prelude::*;
 use slicable::Slicable;
 use primitives::{Block, UncheckedTransaction};
 
-/// A simple test.
-pub fn simple_test(input: &[u8]) -> Vec<u8> {
-	println!("Executing block");
-	Vec::new()
-}
-
 /// Execute a block, with `input` being the canonical serialisation of the block. Returns the
 /// empty vector.
 pub fn execute_block(input: &[u8]) -> Vec<u8> {
@@ -53,11 +47,12 @@ pub fn execute_block(input: &[u8]) -> Vec<u8> {
 
 /// Execute a given, serialised, transaction. Returns the empty vector.
 pub fn execute_transaction(input: &[u8]) -> Vec<u8> {
-	println!("Deserialising... {:?}", input);
+	if input.len() == 0 {
+		panic!("no transaction data given!");
+	}
 	let utx = UncheckedTransaction::from_slice(input).unwrap();
-	println!("Forwarding... {:?}", utx);
 	runtime::system::execute_transaction(&utx);
-	Vec::new()
+	input.to_vec()//Vec::new()
 }
 
 impl_stubs!(execute_block, execute_transaction);
diff --git a/substrate/wasm-runtime/polkadot/src/runtime/system.rs b/substrate/wasm-runtime/polkadot/src/runtime/system.rs
index 70348574b1..042d1af2d7 100644
--- a/substrate/wasm-runtime/polkadot/src/runtime/system.rs
+++ b/substrate/wasm-runtime/polkadot/src/runtime/system.rs
@@ -84,7 +84,6 @@ pub fn execute_block(mut block: Block) {
 
 /// Execute a given transaction.
 pub fn execute_transaction(utx: &UncheckedTransaction) {
-	println!("Executing...");
 	// Verify the signature is good.
 	assert!(utx.ed25519_verify(), "All transactions should be properly signed");
 
@@ -98,8 +97,6 @@ pub fn execute_transaction(utx: &UncheckedTransaction) {
 	// increment nonce in storage
 	(expected_nonce + 1).store(&nonce_key);
 
-	println!("Dispatching...");
-
 	// decode parameters and dispatch
 	tx.function.dispatch(&tx.signed, &tx.input_data);
 }
diff --git a/substrate/wasm-runtime/support/src/lib.rs b/substrate/wasm-runtime/support/src/lib.rs
index 0c13c17ff7..d0b4c8a799 100644
--- a/substrate/wasm-runtime/support/src/lib.rs
+++ b/substrate/wasm-runtime/support/src/lib.rs
@@ -144,7 +144,13 @@ macro_rules! impl_stubs {
 					};
 
 					let output = super::$name(&input[..]);
-					&output[0] as *const u8 as u64 + ((output.len() as u64) << 32)
+					// things break if we try to take the address of an unallocated vec, so we
+					// shortcircuit the empty output case.
+					if output.len() > 0 {
+						&output[0] as *const u8 as u64 + ((output.len() as u64) << 32)
+					} else {
+						0
+					}
 				}
 			)*
 		}
diff --git a/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.compact.wasm b/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.compact.wasm
index 688c7bcdb8..dfff5d575e 100644
Binary files a/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.compact.wasm and b/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.compact.wasm differ
diff --git a/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.wasm b/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.wasm
index 861eb4c608..441bee2cd5 100644
Binary files a/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.wasm and b/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_polkadot.wasm differ
diff --git a/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_test.compact.wasm b/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_test.compact.wasm
index b2576fa074..3ae531562e 100644
Binary files a/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_test.compact.wasm and b/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_test.compact.wasm differ
diff --git a/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_test.wasm b/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_test.wasm
index 1b9dc8a1cd..ac94a72cde 100644
Binary files a/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_test.wasm and b/substrate/wasm-runtime/target/wasm32-unknown-unknown/release/runtime_test.wasm differ
diff --git a/substrate/wasm-runtime/test/src/lib.rs b/substrate/wasm-runtime/test/src/lib.rs
index 6e257a091f..2b9a21c17f 100644
--- a/substrate/wasm-runtime/test/src/lib.rs
+++ b/substrate/wasm-runtime/test/src/lib.rs
@@ -43,4 +43,22 @@ fn test_data_in(input: &[u8]) -> Vec<u8> {
 	b"all ok!".to_vec()
 }
 
-impl_stubs!(test_data_in, test_blake2_256, test_twox_256, test_twox_128, test_ed25519_verify);
+fn test_empty_return(_input: &[u8]) -> Vec<u8> {
+	Vec::new()
+}
+
+fn test_panic(_input: &[u8]) -> Vec<u8> {
+	panic!("test panic");
+}
+
+fn test_conditional_panic(input: &[u8]) -> Vec<u8> {
+	if input.len() > 0 {
+		panic!("test panic");
+	} else {
+		assert!(input.len() > 0);
+	}
+	input.to_vec()
+}
+
+impl_stubs!(test_data_in, test_empty_return, test_panic, test_conditional_panic,
+	test_blake2_256, test_twox_256, test_twox_128, test_ed25519_verify);