Upgradeable Proxy

A common implementation where a proxy contract delegates all function calls to a separate logic contract using delegatecall. The proxy holds the storage, while the logic contract holds the executable code. An admin can upgrade the proxy to point to a new logic contract address, enabling seamless upgrades.

• Key Mechanism: Uses delegatecall to execute code in the logic contract's context but store data in the proxy.
• Admin Role: A designated address controls the upgrade function, a central point of trust and potential failure.

An upgrade pattern where the upgrade logic is embedded within the logic contract itself, not the proxy. This makes the proxy contract simpler and cheaper to deploy.

• Efficiency: Reduces gas costs for proxy deployment.
• Self-Upgrading: The logic contract contains the upgradeTo function, allowing it to authorize its own replacement.
• ERC-1967 Compliance: Uses a standardized storage slot for the logic contract address, defined by EIP-1967.

The core benefit: user balances, permissions, and all stored data remain intact during an upgrade because storage lives in the immutable proxy. The contract's on-chain address also stays the same.

• User Experience: Users and integrated applications (wallets, DEXs) continue to interact with the same address.
• Data Integrity: Critical for protocols with complex state like lending pools or DAOs, where resetting state is impossible.

Upgrades are typically governed by a timelock and/or a multisig wallet to prevent malicious or erroneous updates. This introduces a critical security model.

• Timelock: A delay between an upgrade proposal and its execution, allowing users to review code or exit.
• Multisig: Requires multiple trusted parties to sign off on an upgrade, reducing single-point failure risks.
• Centralization Trade-off: The upgrade authority represents a trusted element in an otherwise trust-minimized system.

Constructors in the logic contract are not run on the proxy's storage. Therefore, initialization functions are used, which can be a security risk if not protected.

• Initializer Pattern: A special function (e.g., initialize()) replaces the constructor to set up initial state.
• Reentrancy Guard: Must be protected to prevent re-initialization attacks that could reset protocol state or grant admin privileges.

A critical risk where the logic contract's variable layout conflicts with the proxy's own reserved storage slots, leading to corrupted state.

• EIP-1967: Defines specific, pseudo-random storage slots for the logic address and admin address to avoid collisions.
• Best Practice: Logic contracts should inherit from storage-safe base contracts (like OpenZeppelin's) that use these standardized slots.

A critical vulnerability where the storage layout of the implementation contract and the proxy contract are mismatched, leading to state corruption. This can be exploited if the proxy's storage variables (like the implementation address) overlap with the logic contract's variables.

• Mitigation: Use established patterns like EIP-1967 for standardized storage slots.
• Risk: Malicious upgrades can overwrite critical proxy state, such as the admin address.

If a malicious upgrade sets the implementation contract's code to selfdestruct, the proxy's logic is permanently destroyed, freezing all funds. This is a denial-of-service attack that bricks the contract.

• Example: The 2017 Parity multi-sig wallet hack, where a vulnerable initialization function allowed an attacker to become the library owner and trigger selfdestruct.
• Mitigation: Use transparent proxies or UUPS patterns that separate upgrade logic from implementation.

In the Transparent Proxy Pattern, the proxy uses the msg.sender to decide whether to delegate a call to the implementation or handle it locally (e.g., for upgradeTo). If the implementation contract has a function with the same selector as a proxy admin function, it can be called unintentionally.

• Risk: An admin may accidentally invoke a user-facing function instead of an admin action.
• Mitigation: Ensure a clear separation of function selectors between proxy admin functions and the implementation's interface.

The entity controlling the proxy admin (a multi-sig, DAO, or EOA) holds unilateral power to change contract logic. This creates a central point of failure and significant trust assumptions for users.

• Governance Risk: Compromised admin keys lead to a total breach.
• Timelock Solution: Implementing a timelock contract between the admin and the proxy forces a delay on upgrades, allowing users to exit.
• Transparency: All pending upgrades should be publicly verifiable.

The bytecode at the implementation address must be verified and immutable. If the implementation is itself a proxy or is upgradeable, it creates a complex dependency chain that is difficult to audit and introduces additional attack surfaces.

• Best Practice: The implementation contract should be deployed, fully verified on block explorers, and then have all ownership/renounce functions disabled to make it immutable.
• Audit Focus: Ensure no backdoors exist in the implementation's constructor or initialization functions.

During an upgrade, a malicious actor can monitor the mempool for the upgradeTo transaction and frontrun it with a call that exploits a known vulnerability in the old implementation before the fix is in place.

• Mitigation: Use a proxy admin contract that atomically upgrades and calls a migration function in a single transaction.
• Pause Mechanism: Some protocols implement an emergency pause in the proxy to freeze activity during the upgrade window.

A pattern for upgrading many identical contracts simultaneously. A single beacon contract holds the current logic address. Many proxy contracts point to this beacon, reading the logic address from it for each call.

• Key Use Case: Upgrading all instances in a deployed system (e.g., all NFT clones in a factory) with a single beacon update.
• Efficiency: Saves gas on mass upgrades compared to updating each proxy individually.
• Example: Used in systems with multiple contract instances like diamond-like facets or ERC-1167 minimal proxies.

Critical security practices for managing proxy upgrades in decentralized protocols. Upgrades are typically controlled by a DAO or multi-signature wallet, not a single admin.

• Timelock: A delay (e.g., 48 hours) is enforced between proposing and executing an upgrade, allowing users to review code or exit.
• Process: A governance proposal passes → upgrade is queued in a timelock contract → executed after the delay.
• Purpose: Mitigates the risk of a malicious or buggy upgrade by introducing a mandatory review period.

A major technical challenge in upgradeable contracts. The storage layout (variable positions and types) must remain compatible between old and new logic versions.

• Golden Rule: Never change the order, type, or remove existing state variables. New variables must be appended.
• Initializers: Replace constructors with initialize functions to set up initial state, as constructors in logic contracts are not called by proxies.
• Tooling: Libraries like OpenZeppelin's StorageSlot help manage storage collisions.

The Implementation Contract (also called the logic contract) contains the executable business logic and state variables. It is the code that the proxy delegates calls to. This contract is immutable, but its address can be pointed to by a proxy, enabling upgrades without migrating state.

• Key Role: Holds the actual code.
• Deployment: Deployed once, referenced by many proxies.
• State: Does not store the proxy's state; state resides in the proxy's storage.

The Proxy Contract is a lightweight contract that holds all the storage (state variables) and uses the delegatecall opcode to forward all function calls to the current Implementation Contract. Users interact directly with the proxy address, which remains constant while the logic behind it can change.

• Core Mechanism: Uses delegatecall for execution.
• Permanent Address: User-facing contract address never changes.
• Storage Layer: Sole holder of the contract's persistent state.

A Proxy Admin is a contract (or externally owned account) that holds the exclusive rights to upgrade the proxy to a new implementation. It acts as the owner of the upgrade mechanism, providing a security layer to prevent unauthorized upgrades.

• Access Control: Manages the upgradeTo function.
• Separation of Concerns: Decouples upgrade authority from daily operations.
• Common Pattern: Used in OpenZeppelin's Transparent Proxy and UUPS proxy models.

Storage Collisions are a critical risk in proxy patterns where the storage layout of the new implementation contract does not match the layout expected by the proxy's existing data. This can corrupt the contract state, leading to catastrophic failures.

• Cause: Adding, removing, or reordering state variables in the implementation.
• Prevention: Using inherited storage gaps or adhering to append-only storage modification rules.
• Tooling: Tools like slither can detect potential layout conflicts.

The Transparent Proxy Pattern is a specific upgradeability design that prevents function selector clashes between the proxy and implementation. It routes calls based on the caller's address: if the caller is the admin, the proxy executes its own functions (like upgradeTo); otherwise, it delegates the call.

• Key Feature: Differentiates between admin and regular user calls.
• Security: Prevents an attacker from invoking proxy admin functions.
• Gas Overhead: Slightly higher gas cost due to the routing logic.

UUPS (Universal Upgradeable Proxy Standard, EIP-1822) is a proxy pattern where the upgrade logic is built directly into the implementation contract itself, not the proxy. This makes proxies lighter and cheaper to deploy, but requires each implementation to contain the upgrade mechanism.

• Design Philosophy: "Upgradeability is a feature of the implementation."
• Gas Efficiency: Lower proxy deployment and runtime gas costs.
• Responsibility: Developers must ensure new implementations remain upgradeable.