Reentrancy attack

It is important to protect digital assets stored in smart contracts. Smart contracts are responsible for the transfer of these assets to their owner on demand. However, an underdeveloped smart contract with security bugs can allow a hacker to siphon off all assets using a reentrancy attack. It can have serious consequences because it has the capability to whisk away all funds from the contract.

A reentrancy attack happens when a smart contract implements a function that transfers an asset to an address belonging to a third party. In such cases, a hacker writes a malicious smart contract that acts as one of the users of the smart contract. The malicious smart contract then calls the methods that initiate the transfer of assets; however, it traps the response and makes a recursive callback for the withdrawal of assets. The recursion will continue as long these funds are within the contract.

A reentrancy attack happens because of a lack of proper smart contract...