diff --git a/x/contracts/transactor/transactor.go b/x/contracts/transactor/transactor.go
index b7f2fc1da..8bd1bbfa2 100644
--- a/x/contracts/transactor/transactor.go
+++ b/x/contracts/transactor/transactor.go
@@ -2,6 +2,7 @@ package transactor
 
 import (
 	"context"
+	"log/slog"
 	"time"
 
 	"github.com/ethereum/go-ethereum/accounts/abi/bind"
@@ -11,6 +12,14 @@ import (
 
 const (
 	txnRetriesLimit = 3
+
+	// defaultMaxNonceDrift is the maximum allowed difference between the
+	// local nonce counter and the chain's pending nonce before the transactor
+	// resets to the chain nonce. Since sends are serialized via a size-1
+	// channel, under normal operation the drift should be 0. A drift larger
+	// than this threshold indicates that previously sent transactions were
+	// lost (e.g. mempool cleared after a node restart).
+	defaultMaxNonceDrift uint64 = 5
 )
 
 // Watcher is an interface that is used to manage the lifecycle of a transaction.
@@ -37,24 +46,52 @@ type Watcher interface {
 // of an error, the nonce is put back into the channel so that it can be reused.
 type Transactor struct {
 	bind.ContractBackend
-	nonceChan chan uint64
-	watcher   Watcher
+	nonceChan     chan uint64
+	watcher       Watcher
+	maxNonceDrift uint64
+	logger        *slog.Logger
+}
+
+// Option is a functional option for configuring the Transactor.
+type Option func(*Transactor)
+
+// WithMaxNonceDrift sets the maximum allowed drift between the local nonce
+// counter and the chain's pending nonce before the transactor self-heals by
+// resetting to the chain nonce.
+func WithMaxNonceDrift(n uint64) Option {
+	return func(t *Transactor) {
+		t.maxNonceDrift = n
+	}
+}
+
+// WithLogger sets the logger for the transactor.
+func WithLogger(l *slog.Logger) Option {
+	return func(t *Transactor) {
+		t.logger = l
+	}
 }
 
 func NewTransactor(
 	backend bind.ContractBackend,
 	watcher Watcher,
+	opts ...Option,
 ) *Transactor {
 	nonceChan := make(chan uint64, 1)
 	// We need to send a value to the channel so that the first transaction
 	// can be sent. The value is not important as the first transaction will
 	// get the nonce from the blockchain.
 	nonceChan <- 0
-	return &Transactor{
+	t := &Transactor{
 		ContractBackend: backend,
 		watcher:         watcher,
 		nonceChan:       nonceChan,
+		maxNonceDrift:   defaultMaxNonceDrift,
+		logger:          slog.Default(),
+	}
+	for _, opt := range opts {
+		opt(t)
 	}
+	return t
 }
 
 func (t *Transactor) PendingNonceAt(ctx context.Context, account common.Address) (uint64, error) {
@@ -73,6 +110,19 @@ func (t *Transactor) PendingNonceAt(ctx context.Context, account common.Address)
 		if pendingNonce > nonce {
 			return pendingNonce, nil
 		}
+		// Self-healing: if local nonce drifts too far ahead of the chain's
+		// pending nonce, transactions were likely lost (e.g. mempool cleared
+		// after a node restart). Reset to chain nonce to close the gap.
+		// This does not add any extra RPC calls — we already query the
+		// chain's pending nonce above.
+		if nonce > pendingNonce+t.maxNonceDrift {
+			t.logger.Warn("nonce drift detected, resetting to chain pending nonce",
+				"localNonce", nonce,
+				"chainPendingNonce", pendingNonce,
+				"drift", nonce-pendingNonce,
+			)
+			return pendingNonce, nil
+		}
 		return nonce, nil
 	}
 }
@@ -90,28 +140,34 @@ func (t *Transactor) SendTransaction(ctx context.Context, tx *types.Transaction)
 		return ctx.Err()
 	}
 
+	var sendErr error
 	delay := 1 * time.Second
 	for tries := 0; tries <= txnRetriesLimit; tries++ {
 		cctx, cancel := context.WithTimeout(ctx, 5*time.Second)
-		defer cancel()
+		sendErr = t.ContractBackend.SendTransaction(cctx, tx)
+		cancel()
 
-		if err := t.ContractBackend.SendTransaction(cctx, tx); err != nil {
-			if err == context.DeadlineExceeded {
+		if sendErr != nil {
+			if sendErr == context.DeadlineExceeded {
 				delay *= 2
 				retryTimer := time.NewTimer(delay)
 				select {
 				case <-ctx.Done():
+					retryTimer.Stop()
 					return ctx.Err()
 				case <-retryTimer.C:
-					_ = retryTimer.Stop()
 				}
 				continue
 			}
-			return err
+			return sendErr
 		}
 		break
 	}
 
+	if sendErr != nil {
+		return sendErr
+	}
+
 	// If the transaction is successful, we need to update the nonce and notify the
 	// watcher.
 	t.watcher.Sent(ctx, tx)
diff --git a/x/contracts/transactor/transactor_test.go b/x/contracts/transactor/transactor_test.go
index 895748e2d..18c86dcb1 100644
--- a/x/contracts/transactor/transactor_test.go
+++ b/x/contracts/transactor/transactor_test.go
@@ -134,6 +134,159 @@ func TestTrasactor(t *testing.T) {
 	}
 }
 
+// autoAllowWatcher is a watcher that always allows and records sent txs.
+type autoAllowWatcher struct {
+	txnChan chan *types.Transaction
+}
+
+func (w *autoAllowWatcher) Allow(_ context.Context, _ uint64) bool {
+	return true
+}
+
+func (w *autoAllowWatcher) Sent(_ context.Context, tx *types.Transaction) {
+	if w.txnChan != nil {
+		w.txnChan <- tx
+	}
+}
+
+func TestNonceDriftSelfHealing(t *testing.T) {
+	t.Parallel()
+
+	backend := &testBackend{
+		nonce: 100, // chain pending nonce
+	}
+	watcher := &autoAllowWatcher{txnChan: make(chan *types.Transaction, 16)}
+	// maxNonceDrift = 5: drift of 6+ triggers reset
+	txnSender := transactor.NewTransactor(backend, watcher, transactor.WithMaxNonceDrift(5))
+
+	// First call: local nonce is 0 (initial), chain says 100 → returns 100
+	nonce, err := txnSender.PendingNonceAt(context.Background(), common.Address{})
+	if err != nil {
+		t.Fatal(err)
+	}
+	if nonce != 100 {
+		t.Fatalf("expected nonce 100, got %d", nonce)
+	}
+
+	// Send nonces 100-109 to advance local nonce to 110
+	for i := uint64(100); i <= 109; i++ {
+		backend.nonce = i + 1 // chain keeps up
+		if i > 100 {
+			nonce, err = txnSender.PendingNonceAt(context.Background(), common.Address{})
+			if err != nil {
+				t.Fatal(err)
+			}
+		}
+		err = txnSender.SendTransaction(context.Background(), types.NewTransaction(nonce, common.Address{}, nil, 0, nil, nil))
+		if err != nil {
+			t.Fatal(err)
+		}
+		<-watcher.txnChan
+		nonce = i + 1
+	}
+
+	// Local nonce is now 110. Simulate mempool wipe: chain nonce drops to 100.
+	// This simulates the node restart scenario where all pending txs are lost.
+	backend.nonce = 100
+
+	// Drift = 110 - 100 = 10 > maxNonceDrift(5) → should reset to 100
+	nonce, err = txnSender.PendingNonceAt(context.Background(), common.Address{})
+	if err != nil {
+		t.Fatal(err)
+	}
+	if nonce != 100 {
+		t.Fatalf("expected nonce to reset to 100 (chain nonce), got %d", nonce)
+	}
+}
+
+func TestNonceDriftWithinThreshold(t *testing.T) {
+	t.Parallel()
+
+	backend := &testBackend{
+		nonce: 100,
+	}
+	watcher := &autoAllowWatcher{txnChan: make(chan *types.Transaction, 16)}
+	txnSender := transactor.NewTransactor(backend, watcher, transactor.WithMaxNonceDrift(5))
+
+	// Get initial nonce from chain (100)
+	nonce, err := txnSender.PendingNonceAt(context.Background(), common.Address{})
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	// Send txs 100-104 to advance local nonce to 105
+	for i := uint64(100); i <= 104; i++ {
+		backend.nonce = i // chain nonce stays behind (simulating pending txs)
+		if i > 100 {
+			nonce, err = txnSender.PendingNonceAt(context.Background(), common.Address{})
+			if err != nil {
+				t.Fatal(err)
+			}
+		}
+		err = txnSender.SendTransaction(context.Background(), types.NewTransaction(nonce, common.Address{}, nil, 0, nil, nil))
+		if err != nil {
+			t.Fatal(err)
+		}
+		<-watcher.txnChan
+		nonce = i + 1
+	}
+
+	// Local nonce = 105. Chain nonce = 104 (drift = 1, within threshold).
+	// Should use local nonce, NOT reset.
+	backend.nonce = 100
+	nonce, err = txnSender.PendingNonceAt(context.Background(), common.Address{})
+	if err != nil {
+		t.Fatal(err)
+	}
+	if nonce != 105 {
+		t.Fatalf("expected local nonce 105 (within drift threshold), got %d", nonce)
+	}
+}
+
+func TestSendTransactionRetriesExhausted(t *testing.T) {
+	t.Parallel()
+
+	backend := &testBackend{
+		nonce:     10,
+		sendTxErr: context.DeadlineExceeded, // all sends timeout
+	}
+	watcher := &autoAllowWatcher{txnChan: make(chan *types.Transaction, 1)}
+	txnSender := transactor.NewTransactor(backend, watcher)
+
+	// Get initial nonce
+	nonce, err := txnSender.PendingNonceAt(context.Background(), common.Address{})
+	if err != nil {
+		t.Fatal(err)
+	}
+	if nonce != 10 {
+		t.Fatalf("expected nonce 10, got %d", nonce)
+	}
+
+	// SendTransaction should fail after exhausting all retries
+	err = txnSender.SendTransaction(context.Background(), types.NewTransaction(nonce, common.Address{}, nil, 0, nil, nil))
+	if err == nil {
+		t.Fatal("expected error when all retries exhausted, got nil")
+	}
+
+	// The nonce should NOT have been incremented — it should be reusable.
+	// Since the defer puts the nonce back, the next PendingNonceAt should return 10.
+	backend.sendTxErr = nil // clear the error so future sends work
+	nonce, err = txnSender.PendingNonceAt(context.Background(), common.Address{})
+	if err != nil {
+		t.Fatal(err)
+	}
+	if nonce != 10 {
+		t.Fatalf("expected nonce to remain 10 after failed retries, got %d", nonce)
+	}
+
+	// Verify no transaction was reported as sent
+	select {
+	case <-watcher.txnChan:
+		t.Fatal("watcher.Sent should not have been called for failed transaction")
+	default:
+	}
+}
+
 type testWatcher struct {
 	allowChan chan uint64
 	txnChan   chan *types.Transaction
@@ -157,6 +310,7 @@ type testBackend struct {
 	nonce           uint64
 	errNonce        uint64
 	pendingNonceErr error
+	sendTxErr       error // if set, SendTransaction always returns this error
 }
 
 func (b *testBackend) PendingNonceAt(ctx context.Context, account common.Address) (uint64, error) {
@@ -167,6 +321,9 @@ func (b *testBackend) PendingNonceAt(ctx context.Context, account common.Address
 }
 
 func (b *testBackend) SendTransaction(ctx context.Context, tx *types.Transaction) error {
+	if b.sendTxErr != nil {
+		return b.sendTxErr
+	}
 	if b.errNonce == tx.Nonce() {
 		return errors.New("nonce error")
 	}