Proxy Contract

A proxy contract acts as an intermediary or a facade that receives all incoming transactions intended for a specific protocol function. Instead of executing the logic itself, it uses a low-level delegatecall to forward the transaction to an implementation or logic contract.

This allows the proxy to maintain the permanent storage and balance of the application while delegating the computational work elsewhere. In derivatives protocols, this enables the underlying margin engine or pricing oracle to be updated seamlessly without disrupting the user experience or requiring a migration of assets.

The proxy essentially holds the permanent identity of the protocol on the blockchain.