Re Entrancy in Registrar Contracts Lessons from Past Incidents

As decentralized naming systems grow in scale and complexity, the underlying smart contracts responsible for domain registration, renewal, transfer, and metadata resolution become critical infrastructure for Web3. Among the most important components in these systems are registrar contracts—the smart contracts that mediate the creation and control of domain name records. However, as these contracts accumulate more functionality and composability, they also become increasingly susceptible to known classes of vulnerabilities. One of the most dangerous and repeatedly exploited among these is re-entrancy, a flaw in smart contract logic that enables an attacker to hijack execution flow mid-transaction. In the context of Web3 registrar contracts, re-entrancy attacks can result in unauthorized minting, theft of domains, or denial of service, posing systemic risks to decentralized identity systems.

Re-entrancy occurs when a smart contract makes an external call to another contract (or to an address capable of executing fallback code) before completing its own state updates. If the recipient of the call is malicious, it can recursively invoke the original contract’s function again, exploiting the fact that internal bookkeeping is incomplete. This allows the attacker to perform unintended actions, such as withdrawing funds multiple times or registering domains without paying the appropriate fee or respecting rate limits. In registrar contracts, where operations like register, renew, or transferFrom often include payable functions and event emissions, the risk of improperly ordered external calls is particularly acute.

One of the earliest warning signs came from theoretical vulnerabilities identified in custom ENS-based registrar forks deployed for DAOs and subcommunity naming systems. These forked registrars often introduced convenience functions such as “registerAndSetResolver” or “batchRegister”, which combined multiple contract interactions in a single call. If any of these included a call to an external resolver or address during the registration loop, a malicious contract could re-enter the registrar and exploit logic that assumed linear execution. For example, by initiating a new registration while the registrar’s internal map of domain status was still being updated, an attacker could mint multiple subdomains under a name they did not own, or front-run other users.

A more severe real-world incident occurred in 2022 during the initial rollout of a Layer 2 registrar system designed to support faster and cheaper name registrations on Arbitrum. In this instance, a re-entrancy bug was introduced via a poorly placed call function that attempted to emit a custom event using a third-party logging contract. The event call happened before the registrar updated its internal state, allowing the malicious logging contract to re-enter the registrar and re-register the same name multiple times. This resulted in the duplication of names across multiple owners, undermining the consistency and uniqueness guarantees that naming systems are built to uphold. Although the affected protocol quickly paused the contract and implemented a patch, it highlighted the need for rigorous sequencing and isolation in all external interactions.

In another case involving a community-operated registrar for .dao names, an exploitable pattern emerged through domain expiration logic. The registrar allowed users to “renew” expired names via a payable function that first sent a portion of the fee to the previous registrant as a goodwill rebate. This refund was executed via a direct call to the former owner’s address before finalizing the renewal state in the registrar. An attacker used a smart contract as the previous owner address, triggering re-entrancy through the refund process and initiating recursive renewals. The attacker was able to extend domain lifespans indefinitely without actually paying renewal fees, effectively squatting on hundreds of expired domains.

These incidents emphasize several important lessons for developers and auditors working on registrar contracts. First, all external calls—whether ETH transfers, event emissions through proxy contracts, or resolver updates—must be sequenced after internal state changes are finalized. This principle, commonly referred to as “checks-effects-interactions,” remains the gold standard for mitigating re-entrancy risk. Internal logic should complete all validations and update all storage variables before making any call, delegatecall, or interaction with untrusted code.

Second, registrar systems must implement strict access control and reentrancy guards using tools like OpenZeppelin’s ReentrancyGuard modifier. Even seemingly innocuous functions like setting resolvers or updating text records can be exploited if the called contracts themselves are under attacker control. By preventing nested entry into sensitive functions, registrars can isolate external logic from internal invariants.

Third, registrars should minimize composability in critical functions. While it is tempting to offer “one-click” actions that bundle multiple operations—such as register-and-resolve or transfer-and-update—these compound functions increase the risk surface. Separating these into atomic operations, while less convenient for end users, enables more deterministic execution and limits the scope of potential exploit chains.

Audit processes must also be expanded to include advanced fuzz testing and formal verification of state transitions, particularly around lifecycle boundaries such as registration, expiration, and transfer. Re-entrancy bugs often lie dormant until the right combination of events triggers them, and traditional manual review can miss subtle state inconsistencies. Automated tools that simulate attacker behavior and execution flow across external calls are essential in catching these edge cases before deployment.

Community response protocols are also essential. Naming registries that discover vulnerabilities must be able to coordinate transparent, time-sensitive responses that include contract pausing, snapshotting ownership states, and offering remediation paths to affected users. In cases where names are duplicated or misallocated due to re-entrancy, consensus-based rollbacks or DAO-driven reassignments may be necessary—though these actions must be taken carefully to preserve decentralization principles and user trust.

As Web3 naming becomes foundational to digital identity, authentication, and communication, the resilience of registrar contracts becomes more than a technical concern—it is a social and infrastructural imperative. Every vulnerability has downstream effects not just on asset ownership but on the reliability of the naming layer as a trust anchor. Learning from past re-entrancy incidents and building more robust registrars ensures that the decentralized naming system remains secure, composable, and reliable in the face of increasing usage and complexity.

In summary, re-entrancy in registrar contracts is not merely a historical footnote but a persistent challenge that must be addressed with discipline, tooling, and a deep understanding of smart contract execution. The future of Web3 naming depends on contracts that are not only functionally rich but provably safe—capable of operating under adversarial conditions while preserving the integrity of the identities and namespaces they protect.

As decentralized naming systems grow in scale and complexity, the underlying smart contracts responsible for domain registration, renewal, transfer, and metadata resolution become critical infrastructure for Web3. Among the most important components in these systems are registrar contracts—the smart contracts that mediate the creation and control of domain name records. However, as these contracts accumulate…