What Are the Risks Associated with Smart Contract Upgrades in a Community-Driven Derivatives Protocol?

Upgrades, even if community-approved, introduce the risk of coding errors or exploits in the new logic. The upgrade process itself can be a point of centralization if a small group holds the key to the implementation.

A flawed upgrade could lock funds, change contract terms unfairly, or introduce security vulnerabilities, jeopardizing the entire user base's assets.