Understand the advantages and disadvantages of smart contracts in DEFI

Author: liam ‘akiba’ wright, cryptoslate; compile: white water, Bit chain vision world

Smart contract agents can upgraded to allow developers to update the logic of deploying smart contracts, while retaining the status and address of the contract.This provides the flexibility of repairing errors or adding functions, but it also brings potential risks.

Smart contracts are automatic execution protocols on the blockchain network. Traditionally, once deployment, it will run as an unsusted code.This non -degeneration is the cornerstone of the trust of blockchain technology, ensuring that the terms of the contract cannot be changed unilaterally.However,It may bring challenges after deployment, mainly when discovering errors or needs to be improved.

Agent in smart contracts can be upgraded

The agent can be upgraded to solve this limit through the introduction of the dual contract system.A proxy contract storage status and user funds, while separate logical contracts include practical functions.The agent entrusts the function to the logical contract, and the logical contract can be replaced with an upgraded version without changing the address of the proxy or interference storage data.

This method has significant advantages.Developers can repair vulnerabilities, realize new functions and optimize performance without interrupting user interaction or need to migrate funds.The main DEFI protocols including Compound, AAVE and Uniswap V3 have adopted upgraded contracts, using this flexibility to enhance its platform over time.Relatively trusted entities.

These agreements have implemented a comprehensive security practice, including thorough audit, formal verification and continuous vulnerability bounty plan.Their smart contracts are open source and allow public censorship and verification functions.In addition, they also adopt a decentralized governance system, which can participate in decision -making to increase transparency and reduce the risk of unilateral changes that may damage users.

Their established performance records further enhanced the credibility of these protocols.They have successfully operated for a long time and manage billions of dollars assets.They are constantly updated and improved their systems based on community feedback and changing market conditions.Powerful monitoring and alarm systems and detailed event response plans show their commitment to security.

In addition, although they are in an emerging field, their efforts in regulatory compliance have added a layer of credibility from the perspective of regulatory agencies.The high flow of these protocols also helps them resist certain types of attacks and market manipulation.However, no system is completely risk. Users should always be cautious and conduct their due diligence when interacting with any Defi protocol.

The risk of upgrading smart contracts

The ability to modify the logic of smart contracts has introduced new potential use channels.Central risk becomes the main focusThe upgrade ability is usually controlled by a small group of administrators or governance participants.If it is not combined with the transparent DAO practice, this power concentration may be in sharp contrast to the decentralized spirit of many blockchain neckmered.

Malicious upgrade is another potential threat.If you are attacked or maliciously act, the administrator can theoretically change the logic of contract to steal user funds or manipulate agreement operations.Although the governance process and security measures are designed to reduce this risk, with the rise of the complex artificial intelligence network fishing fraud, this possibility is still the focus of debate within the community.

The technical vulnerability of the upgrade process has brought additional danger.Errors in the process of upgrade may lead to capital loss, data damage or the contract cannot run.The complexity of the proxy mode increases the attack surface and may introduce some subtle errors. These errors may not be noticed before being used.

How to safely interact with DEFI

For users in the field of DEFI, identification and evaluation can be upgraded to upgrade contracts.Check the proxy mode in the contract code (such as the proxy mode of OpenZeppelin) that can reveal the upgraded function.The protocol document usually discloses the upgrade function, but users should know that this information may not always be displayed.

Evaluating the security of upgraded contracts requires careful consideration of the governance structure and upgrade process.The upgrade time lock allows users to respond to the proposal changes.Multiple signature controls of management functions can allocate power and reduce single -point failure.The reputation and past records of the agreement team provide additional background for evaluation credibility.

For users who avoid risks, when interacting with upgraded contracts, it may be recommended to limit the exposure and long -term storage of large amounts of funds in these systems.Actively monitor the upgrade proposal and participate in the governance process under possible circumstances. Users can understand the situation at any time and may affect the agreement decision.

The upgraded argument around smart contracts reflects a wider tension between innovation and security, flexibility and invariance in the blockchain field.Although upgraded contracts provide strong tools for the development of agreement, they require users to trust the human system, rather than just relying on inseparable code.

A proper balance between upgrading and security is still a core challenge.Users must maintain their vigilance and carefully evaluate the risks and benefits of upgrading system interaction.Autonomous sovereignty is not free; security costs and risks are paid by end users.In traditional finance, these costs are processed by centralized institutions such as banks and financial institutions.It is for this reason that “bank security” is a term used to define high -end security systems.

Autonomous custody means that responsibilities eventually fall on users, and the traditional attitude of freedom of security and risk is incompatible with Web 3.

To support this, developers and agreement teams are responsible for implementing a strong governance mechanism and transparent upgrade process to maintain user trust.

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