Upgradable smart contracts enable developers to modify their codes without changing their state, address, and balance. Read on.
Permissioned and permissionless blockchains utilize smart contract development to implement agreements among parties without any third-party involvement. It is an impact of blockchain immutability that restricts any party from changing the pre-defined conditions of a deployed smart contract. However, this aspect of blockchain makes it impossible to update contracts in case of unfairness, incorrectness, or security flaws. So, blockchain researchers and industry experts developed upgradable smart contracts to address this issue.
In this article, we will explore why there is a need for these contracts, their fundamentals and different upgradable mechanisms, and more.
Upgradable smart contracts are computer programs that enable developers to modify their codes without changing their state, address, and balance. They give programmers the capability to add new features to projects and more.
A smart contract is an essential part of crypto tokens, decentralized applications (dApps), non-fungible tokens (NFTs), and more. It implements the order by following pre-defined rules. It is immutable and permanent, so developers cannot make any changes.
But a dApp can have more than one smart contract that works together to provide its backend. It means that developers can enhance the interaction pattern among those smart contracts. Rather than changing the code of a smart contract, developers swap one smart contract for another while upgrading the contract.
In this way, users do not have to alter how they interact with the dApp.
Essentially, upgrading smart contracts is replacing old smart contracts with new ones. Subsequently, you can abandon old smart contracts and use new smart contracts.
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The following reasons may require you to upgrade smart contracts:
One of the reasons to upgrade smart contracts is to fix bugs. You may find bugs in the production that may cause a damaging impact. In one instance, a reentrancy bug in a DAO contract enabled attackers to withdraw ethers, causing million dollars loss.
In such cases, developers have to opt for upgradable smart contracts to avoid any devastating consequences.
Product improvement gives new value to customers with more efficiency, easier usage, and better quality. It also requires you to upgrade the product's underlying smart contract.
Also, developers can add new features to your decentralized application (DeFi) with logic upgrades.
You can enhance code quality and efficiency with code optimization. Subsequently, a program will consume fewer resources and deliver high speed. The process will enable more efficient utilization of Ethereum gas. It also requires upgrading smart contracts.
There could be some functionalities you no longer require or consider useful. You can modify these services or components by upgrading smart contracts.
Bugs in smart contracts can lead to security leads. So, smart contract upgrades can ensure end-users safety by conveniently fixing vulnerabilities identified in the post-deployment phase.
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The following are the mechanisms developers can use for upgrading smart contracts:
Even though upgradable smart contracts provide new functionality, bug fixing, and better user experience, they have some drawbacks. Below are some limitations of upgrading smart contracts:
Conventionally, smart contracts are immutable, so users trust that no one can implement random changes in an application. Users, therefore, interact freely with the dApp.
Upgradable smart contracts nullify this idea of the immutability of smart contract code. It may raise concerns about decentralization and security.
Upgrading smart contracts may lead to insecure access control. Malicious actors may execute unauthorized upgrades if they get centralized access to these programs.
Due diligence is a critical process to check the technical condition of the product and code quality. There could be a possibility that developers may skip due diligence with smart contract upgrades to launch projects faster.
When programming upgrades functionality into smart contracts, it becomes more complicated. Further, it raises the risk of critical flaws.
Also, Check |Smart Contracts’ Implications in Driving Web 3.0 Revolution
There are the following considerations for upgrading smart contracts:
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Smart contracts, like other software, need upgrade with changing requirements. With the right usage, upgradable smart contracts can provide a way for significant improvements.
If you are interested in changing the functionality of your dApp, then our smart contract developers can assist you. Contact us today to discuss your needs.
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