RISKS & SECURITY
Flash Loan Attack
Definition
Flash loan attacks use uncollateralized loans to manipulate DeFi protocols, often involving price manipulation, arbitrage exploitation, or governance attacks within a single transaction.
Example
Example
An attacker uses flash loans to manipulate an oracle price, borrow against inflated collateral, then repay the flash loan while keeping the stolen funds.
Risks to Consider
Risks
- Protocol drainage
- Market manipulation
- Cascading failures