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Is there really a security exposure to protocols you don’t yourself employ? How do protocols get updated? Can they be EOLed? Turns out there’s a lot I don’t kno

• baobun 1y ago
  It depends. Say you're participating in a lending protocol utilizing some form of on-chain price oracles (ie smart contracts exposing updating data), such that gaming of some particular third decentralized exchange would manipulate the pricing data and could thereby affect your position (triggering liquidation or whatnot). Say you're holding some on-chain stablecoin backed by other tokens. Issues with contracts of those tokens could tank their value and thereby affecting your stablecoin value. It all comes down to introduction of points of trust in interconnected systems. Tale as old as time.
• chrisco255 1y ago
  As sibling comment mentioned, depends on if you integrate with those protocols whether or not you are exposed to external security issues. As for upgrades, some protocols are immutable and can't be updated, however, most complex protocols implement some kind of upgrade mechanic. Smart contracts cannot change their code once deployed, but you can implement a proxy pattern that delegates calls to an implementation contract, and swap out implementation contracts as needed by updating the pointer on the proxy. Some protocols have simple single owner systems for updating the implementation. Some are owned by multisigs and may require a 5 of 9 (or whataver arbitrary majority configuration) committee to sign off on the upgrade. Others require a vote by the token holders of the protocol to approve an upgrade. If it's an upgradeable protocol then it can be EOLed, otherwise it lives forever onchain.