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How to Build Upgradeable Smart Contracts in 2025?

Bydinastafi

Jun 28, 2025

In the fast-paced blockchain industry, smart contracts play a crucial role in automating transactions, governing dApps, and executing decentralized logic. However, a traditional smart contract, once deployed, is immutable  meaning bugs, vulnerabilities, or logic flaws become permanent unless pre-planned alternatives are used. As blockchain projects grow more complex and compliance demands evolve, upgradeable smart contracts have become a necessity in 2025. Upgradeable smart contracts allow developers to change contract logic post-deployment without changing the contract’s address or disrupting its state. This evolution in smart contract architecture has enabled projects to remain agile, secure, and adaptable while maintaining user trust. In this comprehensive guide, we’ll explore everything you need to know to build, deploy, and manage upgradeable smart contracts development in 2025 including architectural patterns, security best practices, tooling options, and real-world implementation strategies using OpenZeppelin, Hardhat, and EVM-compatible chains. Whether you’re building a DeFi protocol, NFT marketplace, DAO, or a Web3 app, mastering upgradeable contracts is now a must.

Why Upgradeability Matters in Smart Contracts

The Problem with Traditional Contracts

Traditional smart contracts are immutable. Once deployed:

  • Bugs become permanent.

  • Logic can’t be altered.

  • Regulatory changes can’t be accommodated.

  • Feature upgrades require new deployments, risking token migration or loss of users.

Benefits of Upgradeable Smart Contracts

  • Post-deployment logic updates

  • Security patches without migration

  • Feature additions and iteration

  • Stable addresses for user trust

  • Backward compatibility

Upgradeability Patterns: Core Architectures in 2025

There are multiple upgradeability patterns, each with unique use cases and limitations. Below are the most adopted ones:

Proxy Pattern (Recommended)

Uses a proxy contract as an intermediary that delegates calls to a logic contract.

  • Proxy Contract: Receives and forwards calls.

  • Logic Contract (Implementation): Contains core business logic.

  • Storage Slot Consistency: Both proxy and logic must have identical storage layouts.

Variants:

  • Transparent Proxy Pattern (OpenZeppelin standard)

  • UUPS (Universal Upgradeable Proxy Standard) — More gas efficient, newer in 2025.

Eternal Storage Pattern

Separates logic and storage. The logic contract calls storage separately, ensuring new versions can use the same storage keys.

  • Safer but more complex.

  • Higher maintenance costs.

Diamond Pattern (EIP-2535)

  • Modular structure using facets (multiple logic contracts).

  • Ideal for large dApps (e.g., DAOs, NFT marketplaces).

  • More complex, gaining adoption in 2025.

Tools and Frameworks for Upgradeable Contracts

In 2025, developers use the following toolchain:

OpenZeppelin Contracts & Upgrades Plugins

  • Battle-tested smart contract libraries.

  • Provides UUPS and Transparent Proxy pattern implementations.

  • Hardhat and Foundry plugins for deployment & upgrades.

Hardhat

  • Dev environment for Solidity with plugin support.

  • @openzeppelin/hardhat-upgrades enables upgrade workflows.

Foundry

  • Fast, Rust-based Solidity framework.

  • Offers proxy integrations via third-party plugins.

Chain Support

Most EVM-compatible chains support upgradeable contracts:

  • Ethereum

  • Arbitrum

  • Base

  • Polygon

  • Avalanche

  • Optimism

  • BNB Chain

Step-by-Step: Building an Upgradeable Smart Contract (Using Hardhat & OpenZeppelin)

Environment Setup

bash
mkdir upgradeable-contracts
cd upgradeable-contracts
npm init -y
npm install --save-dev hardhat @openzeppelin/contracts @openzeppelin/hardhat-upgrades ethers
npx hardhat

Choose “Create a basic sample project.”

Sample Smart Contract

Create contracts/MyToken.sol:

solidity
// SPDX-License-Identifier: MIT
pragma solidity ^0.8.20;

import "@openzeppelin/contracts-upgradeable/token/ERC20/ERC20Upgradeable.sol";
import "@openzeppelin/contracts-upgradeable/proxy/utils/Initializable.sol";

contract MyToken is Initializable, ERC20Upgradeable {
function initialize() public initializer {
__ERC20_init("MyUpgradeableToken", "MUT");
_mint(msg.sender, 1000 * 10 ** decimals());
}
}

Deploying with Proxy

Create scripts/deploy.js:

javascript
const { ethers, upgrades } = require("hardhat");

async function main() {
const MyToken = await ethers.getContractFactory("MyToken");
const proxy = await upgrades.deployProxy(MyToken, [], {
initializer: "initialize",
});

await proxy.waitForDeployment();
console.log("Proxy deployed at:", await proxy.getAddress());
}

main().catch((error) => {
console.error(error);
process.exitCode = 1;
});

Run deployment:

bash
npx hardhat run scripts/deploy.js --network goerli

Upgrading the Smart Contract

Modify Logic

Let’s add a burn function in a new contract.

Create contracts/MyTokenV2.sol:

solidity
// SPDX-License-Identifier: MIT
pragma solidity ^0.8.20;

import "./MyToken.sol";

contract MyTokenV2 is MyToken {
function burn(uint256 amount) public {
_burn(msg.sender, amount);
}
}

Upgrade Script

Create scripts/upgrade.js:

javascript
const { ethers, upgrades } = require("hardhat");

async function main() {
const MyTokenV2 = await ethers.getContractFactory("MyTokenV2");
const upgraded = await upgrades.upgradeProxy(
"PROXY_CONTRACT_ADDRESS",
MyTokenV2
);
console.log("Upgraded contract at:", upgraded.target);
}

main().catch((error) => {
console.error(error);
process.exitCode = 1;
});

Security Best Practices in 2025

Use Initializers, Not Constructors

Proxy patterns do not call constructors, so always use initializer functions and __Contract_init() from OpenZeppelin.

Storage Layout Consistency

  • Changing the order or type of storage variables breaks proxies.

  • Use openzeppelin-upgrades validate to catch issues.

Access Control

  • Use onlyOwner, AccessControl, or Ownable to restrict upgradeTo() functions.

  • Protect upgrade operations from unauthorized access.

Audits & Formal Verification

  • Mandatory in 2025 for DeFi, DAOs, and public chains.

  • Firms like CertiK, ConsenSys Diligence, and Trail of Bits offer deep proxy audits.

Governance and Upgrade Control

Manual Upgrades

For simple projects, upgrades are triggered manually via script.

DAO Governance (On-Chain)

Use DAO frameworks like:

  • Aragon OSx

  • Tally

  • GovernorBravo

Enable token holders to vote on proposed upgrades.

Timelock Contracts

Introduce delay mechanisms to prevent instant upgrades — useful in case of exploit prevention or community objection.

Diamond Pattern for Complex Upgrades

The Diamond Standard (EIP-2535) allows modular upgrades:

  • Facets: Modular logic contracts.

  • Loupe: Allows inspection of facet functions.

  • Ideal for large dApps needing plugin-like logic.

  • Popular in games, DAOs, and marketplaces.

Common Mistakes to Avoid

Mistake Fix
Using constructors Use initializers instead
Breaking storage layout Maintain same order and types
Forgetting admin role Secure upgradeTo function
Skipping audits Always audit before upgrades
Deploying without proxy support Use ERC1967Proxy or UUPS

Future of Upgradeable Contracts in 2025 and Beyond

AI-Assisted Upgrades

2025 sees tools using AI to analyze contract vulnerabilities and suggest upgrade paths automatically.

Upgradeability as a Service

Web3 DevOps platforms now offer:

  • Auto-upgrade pipelines

  • Real-time storage slot diffing

  • Gas optimization suggestions

Layer-2 and Cross-Chain Compatibility

Upgrade systems are now available on:

  • Optimism

  • zkSync

  • Arbitrum

  • Base

Cross-chain upgrades using message-passing protocols like LayerZero are emerging.

Conclusion

As the blockchain ecosystem matures, upgradeable smart contracts are no longer a luxury they’re essential infrastructure. Whether it’s patching a vulnerability, rolling out a new feature, or adjusting to regulatory changes, upgradeable contracts ensure your dApp can evolve without losing user trust or technical integrity. In 2025, the combination of proxy patterns, UUPS, the Diamond Standard, and tools like OpenZeppelin, Hardhat, and Foundry make it easier than ever to deploy secure, modular, and maintainable smart contracts. However, with flexibility comes responsibility developers must follow best practices, validate upgrades, and undergo regular audits. By embracing upgradeability from the start, developers can future-proof their applications and provide users with a safer and more dynamic Web3 experience.

By dinastafi

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