Following the failures of several decentralized application projects that have evaporated millions of dollars either as a result of hacking or simply errors in the code, several solutions have been put in place to remedy this problem, one of them is the updatable smart contract.
Smart contracts are computer programs that can automatically execute the terms of a contract when certain conditions are met. For example, a smart contract could be used to automatically refund a customer's purchase if the product they bought never arrives. They are stored in blockchain transactions and are used to build decentralized applications, also known as "Dapps."
The key features of a smart contract are that they are self-executing, meaning the terms of the contract are automatically executed when certain conditions are met. They are also tamper-proof, once deployed on a blockchain, they cannot be modified. And transparent, as the terms of the contract are visible to all parties involved. In addition, smart contracts are immutable, meaning they cannot be changed or deleted, and naturally decentralized as they are stored on a decentralized network and can be executed without a centralized authority.
Smart contracts have been hailed for the past couple of years as a game-changing technology that could revolutionize the way we do business. However, there are several disadvantages of using smart contracts that should be considered before implementing them. First, smart contracts are immutable, meaning that once they are deployed, they cannot be changed. This can be a problem if there is a flaw in the contract that needs to be fixed, or if the terms of the contract need to be updated. Second, smart contracts are also difficult to debug, which can make it hard to find and fix errors. Finally, smart contracts can be expensive to deploy, as they require gas fees to be paid in order to be executed.
To solve these problems, programmers are investigating the possibilities of upgradeable smart contracts. These are contracts that can be upgraded after they are deployed. This means that the contract code and contract state can be changed. Upgradeable smart contracts come in handy when the contract code needs to be changed or the contract state needs to be updated. They provide, in theory, greater flexibility and customization than traditional smart contracts and therefore can be used to create more complex applications.
To accomplish this, software developers must reconsider the design of their contracts and employ new building patterns. The most widely used pattern is the proxy pattern, which divides the contract into two parts, with the proxy contract holding the data and the logic contract holding the logic. This allows the developer team to completely upgrade the contract without requiring user participation. Other patterns for upgradeable smart contracts include making some contract variables, such as the owner, upgradeable via functions. Alternatively, a registry pattern can be used to provide a central location for storing and retrieving data.
Given that these improved smart contracts address a clear flaw in traditional contracts, one might wonder why they aren't used more widely today. This is due to a number of factors. To begin with, each solution adds a new layer of complexity to the program, which can be counterproductive if poorly implemented because it can result in serious contract damage. The second aspect is more philosophical in nature, because if the person who deployed the contract has the ability to modify it, he retains "ownership," which is frequently unthinkable in this domain.
To conclude, the idea of creating upgradeable smart contracts has been proposed as a way to help grow the decentralized applications ecosystem. The main argument in favor of this idea is that it would allow for more flexibility and experimentation in the development of decentralized applications. Upgradeable smart contracts would give developers the ability to quickly iterate and experiment with new features and functionality without having to hard-fork the applications. This would ultimately lead to more successful and impactful decentralized applications being built. There are also some arguments against this idea. One is that it would centralize power in the hands of the developers who control the contract upgrade process. Another is that it could potentially introduce security vulnerabilities that could be exploited by bad actors. At the end of the day, the decision of whether or not to implement upgradeable smart contracts will come down to a trade-off between decentralization and innovation. It remains to be seen which side will ultimately prevail.