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Phala Network implements a confidential smart contract. It differs from traditional contracts because contracts run inside a special hardware enclave in CPU, i.e. Trusted Execution Environment. The program running inside TEE is highly isolated from the rest of the world. A malicious attack can neither read the data in the memory without authorization nor manipulate the program to produce any unintended behavior. On-chain upgrading is a critical requirement as it greatly reduces security risks on the hard-fork upgrade on the network’s hard-chain.