Proxy addresses allow you to execute non-ownership related actions like spawning child identities, voting, and setting networking keys without jeopardizing the keys you've designated with ownership rights. Setting proxy rights is optional, but it is recommended for on-chain actions you will execute more frequently.
Setting proxies is a good security practice. For instance, you might keep your ownership address in cold storage, while your management proxy is kept in Metamask.
The Urbit HD Wallet automatically sets proxies for your Urbit ID.
Types of proxies
There are three main types of proxy: management, spawn, and voting. Their capabilities are detailed in the following. In addition, each proxy is able to transfer itself to another address - e.g. the management proxy can set a new address to be the management proxy.
Management proxy
Can configure or set Arvo networking keys, factory reset, and conduct sponsorship related operations. Planets, stars, and galaxies may all set a management proxy.
Spawn proxy
For stars and galaxies only. Can create new child identities.
Voting proxy
Galaxies only. Galaxies are the part of the Galactic Senate, and this means they can cast votes on new proposals including changes to Ecliptic.
Transfer proxy
There is also a fourth proxy called the transfer proxy which is considered to be of a different sort than the other three, since it generally only set on a temporary basis to make ownership transfer less mistake-prone, and cleared once ownership has finished.
The address holding the transfer proxy may transfer ownership of the ID to the address of the transfer proxy. This is used to make transferring a two-step process: using the ownership address to set the transfer proxy, and then using the transfer proxy to complete the transaction. It is possible to transfer ownership as a one-step process, but this is risky and not recommended. Bridge does not natively support one-step transfers, you must use an advanced tool like %claz to manually generate such a transaction.