Navigating a Protocol Upgrade or Migration

Detailed Instructions

Begin by clearly defining the primary objectives driving the upgrade. Is it to implement new features, improve security, reduce gas costs, or enhance scalability? Simultaneously, establish quantifiable success criteria (KPIs) to measure the outcome. This phase requires input from all stakeholders, including product, engineering, and business teams.

• Sub-step 1: Conduct Stakeholder Workshops - Gather requirements to document the desired end-state and any non-negotiable constraints.
• Sub-step 2: Draft a Requirements Document - Specify functional requirements (e.g., new smart contract functions) and non-functional requirements (e.g., maintaining < 2-second block time).
• Sub-step 3: Define Rollback Triggers - Establish clear metrics (e.g., >5% transaction failure rate on the new chain) that would necessitate an emergency rollback.

Tip: Use a framework like SMART (Specific, Measurable, Achievable, Relevant, Time-bound) to structure your goals.

Detailed Instructions

Conduct a thorough impact analysis to identify all systems, users, and integrations that will be affected. This includes both on-chain components (smart contracts, oracles) and off-chain components (front-ends, indexers, wallets). Create a detailed dependency map to visualize these relationships.

• Sub-step 1: Inventory All Smart Contracts - List all contract addresses and their roles (e.g., 0x742d35Cc6634C0532925a3b844Bc9e... for the main protocol contract).
• Sub-step 2: Audit External Integrations - Identify all dApps, bridges, and oracles (e.g., Chainlink data feeds) that interact with your protocol.
• Sub-step 3: Analyze User Impact - Determine how the upgrade affects end-users, including potential changes to transaction formats, gas costs, or required user actions (like migrating tokens).

Tip: Use block explorers and event logs to trace all interactions with your protocol's core contracts.

Detailed Instructions

Design the migration architecture, deciding between an in-place upgrade (using proxy patterns) or a full system migration to new contract addresses. For data migration, plan how to transfer state (e.g., user balances, staking positions) from the old system to the new one. This step defines the technical blueprint for execution.

• Sub-step 1: Choose Upgrade Mechanism - Decide on using an upgradeable proxy (e.g., OpenZeppelin's Transparent Proxy) or a new contract deployment with a migration script.
• Sub-step 2: Design State Migration - If migrating state, write the specification for the migration contract. For example, a function to snapshot balances:

solidityCopy
function snapshotBalances(address[] calldata users) external onlyOwner {
    for (uint i = 0; i < users.length; i++) {
        snapshots[users[i]] = balanceOf(users[i]);
    }
}

• Sub-step 3: Plan Deployment Phases - Sequence the deployment: testnets first (Goerli, Sepolia), then a staged rollout on mainnet.

Tip: Always include a timelock contract for administrative actions to increase security and community trust.

Detailed Instructions

A successful upgrade requires transparent community communication and often formal governance approval. Develop a multi-channel communication plan (blog posts, Discord/Twitter announcements, governance forum posts) that outlines the why, how, and when of the upgrade. For decentralized protocols, this includes drafting and shepherding a governance proposal.

• Sub-step 1: Draft the Governance Proposal - Create a detailed proposal for the community forum (e.g., a Snapshot space) including all technical details, risks, and voting options.
• Sub-step 2: Create a Public Timeline - Publish a clear roadmap with key dates: proposal posting, voting period (e.g., 7 days), and the planned mainnet execution block height (e.g., block #18,500,000).
• Sub-step 3: Prepare Support Channels - Set up dedicated support channels for users, create FAQ documents, and prepare migration guides for integrators.

Tip: Engage with key community members and large token holders early in the process to gather feedback and build consensus.

Detailed Instructions

Begin by writing the new smart contract logic for the upgrade. This involves creating a new implementation contract (e.g., V2Protocol.sol) that inherits from or replaces the old one. Use a proxy pattern like Transparent Proxy or UUPS to enable seamless state preservation. Key actions include defining new functions, modifying storage layouts, and ensuring upgrade safety by avoiding storage collisions.

• Sub-step 1: Write the new contract code in Solidity, implementing the required feature changes and fixes.
• Sub-step 2: Compile the contract using a specific compiler version (e.g., solc 0.8.20) and run extensive unit tests with Hardhat or Foundry.
• Sub-step 3: Deploy the new implementation contract to a testnet (e.g., Sepolia or Goerli) at a specific address like 0x742d35Cc6634C0532925a3b844Bc9e.... Verify the source code on a block explorer.

Tip: Always use a timelock contract for the proxy admin to introduce a mandatory delay before the upgrade is executed, allowing users to review changes.

Detailed Instructions

This step involves preparing the exact calldata for the upgrade transaction. For a UUPS upgrade, this is a call to the upgradeTo(address) function on the proxy contract. You must calculate the exact gas costs and simulate the transaction's effects on a forked mainnet to identify any potential issues like reverts or unexpected state changes.

• Sub-step 1: Use a tool like Hardhat's fork feature to create a local fork of the mainnet at a specific block (e.g., block number 19283746).
• Sub-step 2: Craft the upgrade transaction. For example, if your proxy is at 0xABCD... and the new implementation is at 0x1234..., the calldata would be the encoded function call: upgradeTo(0x1234...).
• Sub-step 3: Simulate the transaction using eth_call or Hardhat's contract.provider.call() to ensure it succeeds and does not alter any user balances or critical state incorrectly.

Tip: Always simulate the transaction from multiple sender addresses (e.g., the timelock, a multisig) to ensure authorization logic is correct.

Detailed Instructions

Deploy the entire upgraded system on a long-lived testnet environment. This is where you perform integration testing by having simulated users interact with the new contracts. The goal is to verify that the protocol invariants (e.g., total supply consistency, fee accrual) hold and that there is no regression in existing functionality. Use automated scripts to simulate high-load scenarios.

• Sub-step 1: Deploy a full suite of ancillary contracts (oracles, keepers, routers) that interact with the new protocol implementation on a testnet.
• Sub-step 2: Run a pre-written suite of integration tests that mimic real user flows—deposits, swaps, withdrawals—and check key metrics.
• Sub-step 3: Execute regression tests by replaying historical mainnet transactions against the forked, upgraded system to ensure identical outcomes for past actions.

javascriptCopy
// Example test snippet checking an invariant
const totalSupply = await v2Contract.totalSupply();
const sumOfBalances = await calculateSumOfAllUserBalances();
assert(totalSupply.eq(sumOfBalances), "Invariant broken: supply != sum of balances");

Tip: Involve the community or a select group of beta testers in this phase to gather feedback on the user experience.

Detailed Instructions

After the initial development and testing, a formal security audit by a reputable firm is crucial. This step involves reviewing the audit report, addressing all critical and major issues, and implementing the recommended fixes. Once the code is finalized, create the exact deployment and execution scripts that will be run on mainnet. These scripts must include precise gas estimates, nonce management, and fail-safes.

• Sub-step 1: Review the audit report (e.g., from ChainSecurity or OpenZeppelin) and patch any vulnerabilities identified. Redeploy the fixed contracts to a testnet and re-run critical tests.
• Sub-step 2: Write the final deployment script using a framework like Hardhat. This script should include the exact command to propose the upgrade to the timelock, such as await timelock.schedule(proxy.address, 0, upgradeCalldata, ...).
• Sub-step 3: Perform a final dry-run on a forked mainnet using the exact script, private keys, and gas settings intended for the live deployment. Confirm the post-upgrade state is correct.

Tip: Create a detailed rollback plan and script as part of this preparation. In case of a critical failure post-upgrade, you must be able to quickly revert to the previous implementation.

Detailed Instructions

Governance proposal submission is the formal process of presenting the finalized upgrade for community approval. This step involves compiling all technical specifications, audit reports, and migration scripts into a clear proposal.

• Sub-step 1: Assemble final proposal payload: Include the new contract bytecode, constructor arguments, and the precise targetContractAddress (e.g., 0x89205A3A3b2A69De6Dbf7f01ED13B2108B2c43e7) for the upgrade.
• Sub-step 2: Set voting parameters: Define the voting period (e.g., 7 days), quorum threshold (e.g., 4% of total token supply), and the required majority (e.g., 60% FOR).
• Sub-step 3: Submit on-chain: Use the governance contract's propose function. For example:

codeCopy
GovernorAlpha(governanceAddress).propose(
    [targetContractAddress],
    [0], // values
    ["upgradeTo(address)"], // function signatures
    [abi.encode(newImplementationAddress)], // calldata
    "Upgrade Vault contract to v2.1 with new fee structure"
);

Tip: Ensure the proposal description includes a link to the full technical documentation and a summary of changes for non-technical voters.

Detailed Instructions

Proposal execution activates the upgrade by calling the governance contract's execute function. This is a permissioned transaction that must be initiated by a designated executor after the voting period ends successfully.

• Sub-step 1: Verify vote outcome: Confirm the proposal ID (e.g., Proposal #42) has passed by checking the state() function, which should return 4 (Succeeded).
• Sub-step 2: Queue the proposal: If required by the governance system, queue the proposal for execution after a mandatory timelock delay (e.g., 48 hours).
• Sub-step 3: Execute the upgrade transaction: The executor calls execute(proposalId) on the governance contract. This will trigger a low-level call to the proxy admin contract, such as TransparentUpgradeableProxyAdmin, to point the proxy to the new implementation. Monitor the transaction hash (e.g., 0xabc123...) on a block explorer.

Tip: Perform a final simulation of the execute transaction on a testnet fork to ensure no unexpected reverts occur due to state changes since the proposal was created.

Detailed Instructions

Post-deployment verification is critical to ensure the upgrade was applied correctly and the system is in a valid initial state. This involves checking contract addresses, storage layout, and initial parameters.

• Sub-step 1: Confirm implementation address: Query the proxy contract's implementation() function. It should return the new address (e.g., 0xFeDcBa987654321...).
• Sub-step 2: Verify contract integrity: Use a verification service (like Etherscan) to upload and verify the source code for the new implementation address, ensuring the bytecode matches your build.
• Sub-step 3: Initialize new contracts: If the new implementation requires one-time setup, call the initialize() function with the correct parameters (e.g., new fee rate of 15 basis points, or 1500000000000000 in contract units). Ensure this is done by the authorized owner or initializer role.
• Sub-step 4: Run sanity checks: Perform read-only calls to key functions to confirm they return expected values, such as totalSupply(), name(), or a new protocolFee() getter.

Tip: Create and run a dedicated verification script that automates these checks and logs the results for the team's records.

Detailed Instructions

Active monitoring begins immediately after deployment to catch any anomalies. This phase involves setting up alerts and dashboards to track the health of the new protocol version.

• Sub-step 1: Configure monitoring tools: Set up dashboards in tools like Grafana or Dune Analytics to track key metrics such as transaction volume, TVL, gas usage for core functions, and error/revert rates. Create alerts for critical thresholds (e.g., contract balance below 50 ETH).
• Sub-step 2: Monitor event logs: Watch for specific events from the new contracts, such as Upgraded(address) from the proxy or custom events like FeeCollected(address indexed user, uint256 amount). Use a service like The Graph or an indexer to parse this data.
• Sub-step 3: Announce upgrade completion: Publish a formal announcement on all communication channels (blog, Discord, Twitter). Include essential information for users:
  • The new contract addresses and block number of the upgrade.
  • Any required actions from users (e.g., re-approving token allowances for new contracts).
  • Links to updated front-end interfaces and documentation.
  • A point of contact for support issues.

Tip: Maintain a dedicated incident response channel for the first 72 hours post-upgrade to quickly address any user-reported issues or confusion.