Got this in a smart contract dev interview—how do Ethereum upgrades affect live contracts?

Ethereum’s upgrades, such as Ethereum Improvement Proposals (EIPs), generally do not automatically alter smart contracts that are already live; developers need to take action to implement new features or optimizations. The blockchain operates in a backward-compatible way to ensure that existing contracts continue to function as they were initially deployed, even after major network upgrades.

However, incorporating the benefits of certain EIPs, like gas optimizations or added functionalities, may require developers to redeploy or modify the smart contract. For instance, updates that impact gas fees (like EIP-1559) affect transaction costs network-wide but do not change the actual logic of existing smart contracts. There can be compatibility considerations, as newer features may only be accessible if a contract interacts with freshly deployed code or external contracts designed for the updated environment.

Ethereum upgrades, like EIPs, do not automatically update live smart contracts. Developers must manually update or redeploy their contracts to benefit from new features or changes.

Ethereum upgrades change the protocol, but deployed smart contracts remain unaffected unless manually updated. When Ethereum updates, developers need to review and modify their contracts to ensure compatibility with new features or improvements. These updates can introduce compatibility issues if there are changes to how the Ethereum Virtual Machine (EVM) processes transactions. Additionally, some upgrades may increase gas fees or change transaction costs, impacting the contract's efficiency. Developers should test new upgrades in a development environment to check for compatibility and assess any potential changes in cost or performance.