List of Re-entrancy Hacks/Exploits in Crypto

What is a Reentrancy Attack in Crypto

A reentrancy attack in the context of cryptocurrencies and smart contracts refers to a specific type of vulnerability where an attacker can repeatedly call a function within a contract before the previous invocation has been completed. This allows the attacker to potentially manipulate the contract’s state and even steal funds.

Here’s how a typical reentrancy attack works:

• Vulnerable Contract: A smart contract has a function that interacts with an external entity (e.g., another contract or an external wallet).
• Callback Mechanism: The vulnerable contract initiates an external call and waits for a response.
• Recursive Call: Before the first call completes, the attacker recursively calls the vulnerable function again from within the callback of the first call.
• State Manipulation: The contract’s state may not be properly updated between calls, allowing the attacker to perform operations that could result in unintended behaviors, such as transferring more funds than intended.

Types of Reentrancy Attacks

Types of reentrancy attacks can vary based on the specific conditions and context in which the vulnerability is exploited. Here are some common types:

• Single-function Reentrancy: This refers to a specific type of reentrancy attack in which an attacker exploits a vulnerability within a single function of a smart contract. This type of attack occurs when the contract’s function does not properly manage its state changes and interactions with other contracts or external entities.
• Cross-chain reentrancy: It refers to a specific type of vulnerability or attack that can occur in blockchain networks, particularly those that support smart contracts and have interoperability between different blockchains (cross-chain capabilities)
• Direct Reentrancy: The attacker directly calls the vulnerable function again from within the same transaction.
• Cross-function Reentrancy: The attacker exploits a vulnerability where one function of the contract makes an external call, and another function within the same contract (or in another contract) allows reentry during its execution.
• Cross-contract Reentrancy: Similar to cross-function, but involves calls to functions in different contracts where the state changes in an unpredictable manner due to reentry.
• Fallback Function Reentrancy: Exploiting the fallback function in a contract, which is called when a contract receives ether but does not match any function signature. If this fallback function makes external calls, it can be vulnerable to reentrancy.
• Read-Only Reentrancy: It refers to a property in concurrent programming where a function or method can be safely called simultaneously from multiple threads or contexts, as long as it only reads shared data and does not modify it. In other words, a read-only reentrant function guarantees that it won’t change any state that could affect the correctness of other threads accessing the same data concurrently.

To mitigate reentrancy attacks, developers should follow best practices such as ensuring proper state management, using checks-effects-interactions patterns, and using mechanisms like mutex locks to prevent recursive calls to sensitive functions. Additionally, auditing smart contracts thoroughly for such vulnerabilities before deployment is crucial to avoid potential exploits.