Overview
A flash loan attack uses flash loans to manipulate prices or drain protocols within one transaction. Flash loans provide instant, uncollateralized capital, amplifying exploits. They have enabled many high-profile hacks.
How It Works
An attacker borrows massive capital via a flash loan, manipulates a price or exploits a bug, repays the loan, and keeps the profit in a single atomic transaction. The attack requires no upfront capital. Protocol flaws are the root cause.
Why It Matters
Flash loan attacks show how capital and composability can amplify vulnerabilities. They force protocols to harden against manipulation. Understanding them is key to security and risk assessment.
Related Concepts
Flash Loan Attacks relate to Flash Loans, Oracle Manipulation, and Reentrancy. They highlight DeFi's composability risks.