Smart contract proxy upgradeability in DeFi allows for the updating of contract logic while maintaining state and address, offering flexibility but also introducing risks. While immutability is a key feature of blockchain trust, the inability to modify contracts post-deployment can be challenging. Proxy-upgradeability addresses this by using a two-contract system, enhancing security and transparency. Major DeFi protocols like Compound and Aave have adopted upgradeable contracts, bolstering trust through security measures and decentralized governance. However, risks such as centralization and malicious upgrades remain. Users navigating DeFi must carefully evaluate upgradeable contracts, considering governance structures and reputation. Striking a balance between innovation and security is crucial, as self-sovereignty in Web 3 requires users to bear the costs and risks of security. Developers play a key role in implementing transparent upgrade processes to maintain user trust in the evolving blockchain space. Read more AI-generated news on: https://app.chaingpt.org/news