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Could you please let me know what do you mean by "However, if I try to upgrade my app with itself via CySmart when my app is running I always get an authentication failure."
To update the app , you need to give control to Stack project for receiving the new image in the upgradable stack bootloader architecture.
Could you please attach your workspace bundle here ( Right Click on the workspace name-> Archive workspace )
You're right, the Stack is responsible for receiving and flashing a new application image. My bad, I didn't realise it when I asked the question. The Stack authenticates perfectly well in this scenario.