What Is a “Re-Entrancy Attack” and Why Is It a Common Smart Contract Vulnerability?
A re-entrancy attack is a critical smart contract vulnerability where an external malicious contract repeatedly calls back into the original vulnerable contract before the original contract has finished updating its state (e.g. updating a balance). This allows the attacker to drain funds multiple times.
It is common because developers often overlook the potential for external calls to hijack the execution flow, making it a frequent target for exploitation.
Glossar
Smart Contract Vulnerability
Exploit ⎊ Within decentralized finance (DeFi) and cryptocurrency derivatives, an exploit represents the successful leveraging of a smart contract vulnerability to illicitly extract value or disrupt intended functionality.
The Dao Hack
Event ⎊ The Dao Hack was a seminal security incident involving the exploitation of a reentrancy vulnerability in a decentralized autonomous organization's contract, resulting in the draining of a significant portion of its Ether holdings.
Smart Contract
Code ⎊ The contract is fundamentally self-executing code deployed on a distributed ledger, embodying the terms of the agreement in an immutable format.