diff --git a/contracts/proxy-contract/tests/sanity.rs b/contracts/proxy-contract/tests/sanity.rs
new file mode 100644
index 0000000..27155c8
--- /dev/null
+++ b/contracts/proxy-contract/tests/sanity.rs
@@ -0,0 +1,362 @@
+use fuels::prelude::*;
+
+use test_utils::{
+    interfaces::proxy::{proxy_abi, Proxy},
+    setup::common::setup_protocol,
+};
+
+#[tokio::test]
+async fn sanity_testing_setup() {
+    // Setup protocol with initial contracts
+    let (contracts, admin, mut other) = setup_protocol(2, false, false).await;
+
+    let attacker = other.pop().unwrap();
+    // Try to upgrade each contract with unauthorized wallet
+    let new_target = ContractId::from([3u8; 32]);
+
+    let attacker_proxy_usdf = Proxy::new(
+        contracts.usdf.contract.contract_id().clone(),
+        attacker.clone(),
+    );
+    // Test USDF token proxy
+    let res = proxy_abi::set_proxy_target(&attacker_proxy_usdf, new_target).await;
+    assert!(
+        res.is_err(),
+        "Unauthorized wallet should not be able to upgrade USDF token"
+    );
+    if let Err(error) = res {
+        assert!(
+            error.to_string().contains("NotOwner"),
+            "Unexpected error message: {}",
+            error
+        );
+    }
+
+    let admin_proxy_usdf = Proxy::new(contracts.usdf.contract.contract_id().clone(), admin.clone());
+    // Verify admin can still upgrade (testing one contract as example)
+    let res = proxy_abi::set_proxy_target(&admin_proxy_usdf, new_target).await;
+    assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+
+    let attacker_proxy_borrow_operations = Proxy::new(
+        contracts.borrow_operations.contract.contract_id().clone(),
+        attacker.clone(),
+    );
+
+    // Test Borrow Operations proxy
+    let res = proxy_abi::set_proxy_target(&attacker_proxy_borrow_operations, new_target).await;
+    assert!(
+        res.is_err(),
+        "Unauthorized wallet should not be able to upgrade Borrow Operations"
+    );
+    if let Err(error) = res {
+        assert!(
+            error.to_string().contains("NotOwner"),
+            "Unexpected error message: {}",
+            error
+        );
+    }
+
+    // verify admin can upgrade
+    let admin_proxy_sorted_troves = Proxy::new(
+        contracts.sorted_troves.contract.contract_id().clone(),
+        admin.clone(),
+    );
+    let res = proxy_abi::set_proxy_target(&admin_proxy_sorted_troves, new_target).await;
+    assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+
+    let attacker_proxy_sorted_troves = Proxy::new(
+        contracts.sorted_troves.contract.contract_id().clone(),
+        attacker.clone(),
+    );
+    // Test Sorted Troves proxy
+    let res = proxy_abi::set_proxy_target(&attacker_proxy_sorted_troves, new_target).await;
+    assert!(
+        res.is_err(),
+        "Unauthorized wallet should not be able to upgrade Sorted Troves"
+    );
+    if let Err(error) = res {
+        assert!(
+            error.to_string().contains("NotOwner"),
+            "Unexpected error message: {}",
+            error
+        );
+    }
+
+    let admin_proxy_active_pool = Proxy::new(
+        contracts.active_pool.contract.contract_id().clone(),
+        admin.clone(),
+    );
+    let res = proxy_abi::set_proxy_target(&admin_proxy_active_pool, new_target).await;
+    assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+
+    let attacker_proxy_active_pool = Proxy::new(
+        contracts.active_pool.contract.contract_id().clone(),
+        attacker.clone(),
+    );
+    // Test Active Pool proxy
+    let res = proxy_abi::set_proxy_target(&attacker_proxy_active_pool, new_target).await;
+    assert!(
+        res.is_err(),
+        "Unauthorized wallet should not be able to upgrade Active Pool"
+    );
+    if let Err(error) = res {
+        assert!(
+            error.to_string().contains("NotOwner"),
+            "Unexpected error message: {}",
+            error
+        );
+    }
+
+    let admin_proxy_default_pool = Proxy::new(
+        contracts.default_pool.contract.contract_id().clone(),
+        admin.clone(),
+    );
+    let res = proxy_abi::set_proxy_target(&admin_proxy_default_pool, new_target).await;
+    assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+
+    let attacker_proxy_default_pool = Proxy::new(
+        contracts.default_pool.contract.contract_id().clone(),
+        attacker.clone(),
+    );
+    // Test Default Pool proxy
+    let res = proxy_abi::set_proxy_target(&attacker_proxy_default_pool, new_target).await;
+    assert!(
+        res.is_err(),
+        "Unauthorized wallet should not be able to upgrade Default Pool"
+    );
+    if let Err(error) = res {
+        assert!(
+            error.to_string().contains("NotOwner"),
+            "Unexpected error message: {}",
+            error
+        );
+    }
+
+    let admin_proxy_fpt_staking = Proxy::new(
+        contracts.fpt_staking.contract.contract_id().clone(),
+        admin.clone(),
+    );
+    let res = proxy_abi::set_proxy_target(&admin_proxy_fpt_staking, new_target).await;
+    assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+
+    let attacker_proxy_fpt_staking = Proxy::new(
+        contracts.fpt_staking.contract.contract_id().clone(),
+        attacker.clone(),
+    );
+    // Test FPT Staking proxy
+    let res = proxy_abi::set_proxy_target(&attacker_proxy_fpt_staking, new_target).await;
+    assert!(
+        res.is_err(),
+        "Unauthorized wallet should not be able to upgrade FPT Staking"
+    );
+    if let Err(error) = res {
+        assert!(
+            error.to_string().contains("NotOwner"),
+            "Unexpected error message: {}",
+            error
+        );
+    }
+
+    let admin_proxy_fpt_token = Proxy::new(
+        contracts.fpt_token.contract.contract_id().clone(),
+        admin.clone(),
+    );
+    let res = proxy_abi::set_proxy_target(&admin_proxy_fpt_token, new_target).await;
+    assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+
+    // Test each asset contract's components
+    for asset_contract in &contracts.asset_contracts {
+        let attacker_proxy_trove_manager = Proxy::new(
+            asset_contract.trove_manager.contract.contract_id().clone(),
+            attacker.clone(),
+        );
+        // Test Trove Manager proxy
+        let res = proxy_abi::set_proxy_target(&attacker_proxy_trove_manager, new_target).await;
+        assert!(
+            res.is_err(),
+            "Unauthorized wallet should not be able to upgrade Trove Manager"
+        );
+        if let Err(error) = res {
+            assert!(
+                error.to_string().contains("NotOwner"),
+                "Unexpected error message: {}",
+                error
+            );
+        }
+
+        let admin_proxy_oracle = Proxy::new(
+            asset_contract.oracle.contract.contract_id().clone(),
+            admin.clone(),
+        );
+        let res = proxy_abi::set_proxy_target(&admin_proxy_oracle, new_target).await;
+        assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+
+        let attacker_proxy_oracle = Proxy::new(
+            asset_contract.oracle.contract.contract_id().clone(),
+            attacker.clone(),
+        );
+        // Test Oracle proxy
+        let res = proxy_abi::set_proxy_target(&attacker_proxy_oracle, new_target).await;
+        assert!(
+            res.is_err(),
+            "Unauthorized wallet should not be able to upgrade Oracle"
+        );
+        if let Err(error) = res {
+            assert!(
+                error.to_string().contains("NotOwner"),
+                "Unexpected error message: {}",
+                error
+            );
+        }
+
+        let admin_proxy_oracle = Proxy::new(
+            asset_contract.oracle.contract.contract_id().clone(),
+            admin.clone(),
+        );
+        let res = proxy_abi::set_proxy_target(&admin_proxy_oracle, new_target).await;
+        assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+    }
+
+    let admin_proxy_stability_pool = Proxy::new(
+        contracts.stability_pool.contract.contract_id().clone(),
+        admin.clone(),
+    );
+    let res = proxy_abi::set_proxy_target(&admin_proxy_stability_pool, new_target).await;
+    assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+
+    let attacker_proxy_stability_pool = Proxy::new(
+        contracts.stability_pool.contract.contract_id().clone(),
+        attacker.clone(),
+    );
+    // Test Stability Pool proxy
+    let res = proxy_abi::set_proxy_target(&attacker_proxy_stability_pool, new_target).await;
+    assert!(
+        res.is_err(),
+        "Unauthorized wallet should not be able to upgrade Stability Pool"
+    );
+    if let Err(error) = res {
+        assert!(
+            error.to_string().contains("NotOwner"),
+            "Unexpected error message: {}",
+            error
+        );
+    }
+
+    let attacker_proxy_coll_surplus_pool = Proxy::new(
+        contracts.coll_surplus_pool.contract.contract_id().clone(),
+        attacker.clone(),
+    );
+    // Test Collateral Surplus Pool proxy
+    let res = proxy_abi::set_proxy_target(&attacker_proxy_coll_surplus_pool, new_target).await;
+    assert!(
+        res.is_err(),
+        "Unauthorized wallet should not be able to upgrade Collateral Surplus Pool"
+    );
+    if let Err(error) = res {
+        assert!(
+            error.to_string().contains("NotOwner"),
+            "Unexpected error message: {}",
+            error
+        );
+    }
+
+    let admin_proxy_community_issuance = Proxy::new(
+        contracts.community_issuance.contract.contract_id().clone(),
+        admin.clone(),
+    );
+    let res = proxy_abi::set_proxy_target(&admin_proxy_community_issuance, new_target).await;
+    assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+
+    let attacker_proxy_community_issuance = Proxy::new(
+        contracts.community_issuance.contract.contract_id().clone(),
+        attacker.clone(),
+    );
+    // Test Community Issuance proxy
+    let res = proxy_abi::set_proxy_target(&attacker_proxy_community_issuance, new_target).await;
+    assert!(
+        res.is_err(),
+        "Unauthorized wallet should not be able to upgrade Community Issuance"
+    );
+    if let Err(error) = res {
+        assert!(
+            error.to_string().contains("NotOwner"),
+            "Unexpected error message: {}",
+            error
+        );
+    }
+
+    let admin_proxy_vesting = Proxy::new(
+        contracts.vesting_contract.contract.contract_id().clone(),
+        admin.clone(),
+    );
+    let res = proxy_abi::set_proxy_target(&admin_proxy_vesting, new_target).await;
+    assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+
+    let attacker_proxy_vesting = Proxy::new(
+        contracts.vesting_contract.contract.contract_id().clone(),
+        attacker.clone(),
+    );
+    // Test Vesting proxy
+    let res = proxy_abi::set_proxy_target(&attacker_proxy_vesting, new_target).await;
+    assert!(
+        res.is_err(),
+        "Unauthorized wallet should not be able to upgrade Vesting"
+    );
+    if let Err(error) = res {
+        assert!(
+            error.to_string().contains("NotOwner"),
+            "Unexpected error message: {}",
+            error
+        );
+    }
+
+    let admin_proxy_protocol_manager = Proxy::new(
+        contracts.protocol_manager.contract.contract_id().clone(),
+        admin.clone(),
+    );
+    let res = proxy_abi::set_proxy_target(&admin_proxy_protocol_manager, new_target).await;
+    assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+
+    let attacker_proxy_protocol_manager = Proxy::new(
+        contracts.protocol_manager.contract.contract_id().clone(),
+        attacker.clone(),
+    );
+    // Test Protocol Manager proxy
+    let res = proxy_abi::set_proxy_target(&attacker_proxy_protocol_manager, new_target).await;
+    assert!(
+        res.is_err(),
+        "Unauthorized wallet should not be able to upgrade Protocol Manager"
+    );
+    if let Err(error) = res {
+        assert!(
+            error.to_string().contains("NotOwner"),
+            "Unexpected error message: {}",
+            error
+        );
+    }
+
+    let admin_proxy_fpt_token = Proxy::new(
+        contracts.fpt_token.contract.contract_id().clone(),
+        admin.clone(),
+    );
+    let res = proxy_abi::set_proxy_target(&admin_proxy_fpt_token, new_target).await;
+    assert!(res.is_ok(), "Admin should be able to upgrade contracts");
+
+    let attacker_proxy_fpt_token = Proxy::new(
+        contracts.fpt_token.contract.contract_id().clone(),
+        attacker.clone(),
+    );
+    // Test FPT Token proxy
+    let res = proxy_abi::set_proxy_target(&attacker_proxy_fpt_token, new_target).await;
+    assert!(
+        res.is_err(),
+        "Unauthorized wallet should not be able to upgrade FPT Token"
+    );
+    if let Err(error) = res {
+        assert!(
+            error.to_string().contains("NotOwner"),
+            "Unexpected error message: {}",
+            error
+        );
+    }
+}