diff --git a/crates/uplc/src/optimize.rs b/crates/uplc/src/optimize.rs
index 307d30aa..e660d1d5 100644
--- a/crates/uplc/src/optimize.rs
+++ b/crates/uplc/src/optimize.rs
@@ -19,12 +19,11 @@ pub fn aiken_optimize_and_intern(program: Program<Name>) -> Program<Name> {
 
     program
         .lambda_reduce()
-        .inline_basic_reduce()
+        .inline_reduce()
         .lambda_reduce()
-        .inline_basic_reduce()
+        .inline_reduce()
         .force_delay_reduce()
         .wrap_data_reduce()
         .lambda_reduce()
-        .inline_basic_reduce()
-        .inline_direct_reduce()
+        .inline_reduce()
 }
diff --git a/crates/uplc/src/optimize/shrinker.rs b/crates/uplc/src/optimize/shrinker.rs
index 60b95586..ff6aa954 100644
--- a/crates/uplc/src/optimize/shrinker.rs
+++ b/crates/uplc/src/optimize/shrinker.rs
@@ -47,18 +47,9 @@ impl Program<Name> {
         }
     }
 
-    pub fn inline_basic_reduce(self) -> Program<Name> {
+    pub fn inline_reduce(self) -> Program<Name> {
         let mut term = self.term;
         inline_basic_reduce(&mut term);
-
-        Program {
-            version: self.version,
-            term,
-        }
-    }
-
-    pub fn inline_direct_reduce(self) -> Program<Name> {
-        let mut term = self.term;
         inline_direct_reduce(&mut term);
 
         Program {
@@ -177,25 +168,30 @@ fn inline_direct_reduce(term: &mut Term<Name>) {
             let d = Rc::make_mut(d);
             inline_direct_reduce(d);
         }
-        Term::Lambda {
-            parameter_name,
-            body,
-        } => {
+        Term::Lambda { body, .. } => {
             let body = Rc::make_mut(body);
             inline_direct_reduce(body);
-
-            if let Term::Var(name) = body {
-                if name.as_ref() == parameter_name.as_ref() {
-                    *term = body.clone();
-                }
-            }
         }
         Term::Apply { function, argument } => {
             let func = Rc::make_mut(function);
             let arg = Rc::make_mut(argument);
-            inline_direct_reduce(func);
 
+            inline_direct_reduce(func);
             inline_direct_reduce(arg);
+
+            let Term::Lambda { parameter_name, body } = arg
+            else{
+                return;
+            };
+
+            let Term::Var(name) = body.as_ref()
+            else {
+                return;
+            };
+
+            if name.as_ref() == parameter_name.as_ref() {
+                *term = arg.clone();
+            }
         }
         Term::Force(f) => {
             let f = Rc::make_mut(f);