How it works
Contracts can hold assets, issue tokens and coordinate decentralized applications. Once deployed, some contracts are difficult to change while others remain upgradeable.
What to check
Check whether the contract is upgradeable, who controls administrative keys and whether source code and audits are available.
- Check upgradeability
- Identify admin controls
- Review audits without treating them as guarantees
Limits and risks
Code can behave exactly as written and still produce harmful outcomes if the design is flawed. Bugs, malicious upgrades and compromised admin keys can all create losses.
Primary sources
Bitcoin Developer Reference↗Ethereum developer documentation↗FATF: Virtual Assets↗General information only. Investment products can lose value, and terms, fees and regulation can change.