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The 'update' extrinsic is basically a wrapper around the 'create' extrinsic. It is intended to allow for the data encoded on 'create' to be update. This is done by providing a zkp (a DLEQ proof) to the chain that prove you know the seed used to generate the MMR. Technically it doesn't need to be the seed, it's really just proving that you know some secret piece of information that the person who created the wallet also knew. Thus, this requires a new extrinsic that:
takes in a dleq proof bytes + merkle root + proxy name + mmr size
first verifies the dleq proof
then update the storage entry (mapping to by proxy name) with the new root and mmr size
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