Flash Loan Attack

Definition ∞ A flash loan attack is a type of exploit that leverages the uncollateralized, instantaneous nature of flash loans in decentralized finance. Attackers borrow a large sum of cryptocurrency without providing collateral, execute a series of transactions to manipulate market prices or exploit protocol vulnerabilities, and repay the loan within the same transaction block, pocketing the difference. These attacks often result in significant financial losses for affected protocols.
Context ∞ The prevalence of flash loan attacks remains a significant concern within the decentralized finance (DeFi) ecosystem. Current discussions often focus on identifying specific vulnerabilities in smart contract logic, such as reentrancy flaws or price oracle manipulation, that facilitate these exploits. Efforts to enhance protocol security and develop more sophisticated detection mechanisms are continuously underway to mitigate these risks.

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→Protocol Solvency Risk

→Protocols

→Liquidation Mechanism Bypass

Moonwell Lending Protocol Drained via External Oracle Price Manipulation Flaw

Flawed oracle integration permitted a collateral token's price to be grossly inflated, enabling an under-collateralized asset drain.

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→Token Swap

→Decentralized Exchange

→Governance Risk

Balancer V2 Pools Drained Exploiting Smart Contract Access Control Flaw

A critical flaw in the V2 vault's access control logic permitted unauthorized `batchSwap` calls, leading to a systemic, multi-chain liquidity drain.

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→Protocol Governance Failure

→Cross-Chain Asset Theft

→AMM Logic Flaw

DEX AMM Logic Flaw Exploited across Six Chains Draining $48 Million

A sophisticated trade manipulation caused the AMM smart contract to miscalculate key variables, enabling a multi-chain liquidity drain.

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→Batch Swap Function

→Rounding Error

→Systemic Weakness

DeFi Protocol Balancer V2 Drained Exploiting Smart Contract Logic Flaw

A critical rounding error combined with batch swap logic allowed attackers to manipulate pool balances and systematically drain over $120 million across nine chains .

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→Flash Loan Attack

→Multi-Chain Attack

→Internal Balance Manipulation

Balancer V2 Pools Drained Exploiting BatchSwap Rounding and Access Control Flaw

A complex logic flaw leveraging batch swaps and a rounding error allowed attackers to bypass internal access controls, resulting in a $116M liquidity drain.

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→Arbitrary Token Transfer

→Business Logic Error

→Fund Management Protocol

Hedgey Finance Token Locker Drained via Unrevoked Smart Contract Approval

A critical business logic flaw failed to revoke token approvals, allowing unauthorized `transferFrom` calls to drain $44.7 million in locked assets.

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→Smart Contract Audit

→Asset Depletion

→Composable Pools

DeFi Protocol Balancer V2 Suffers Massive Smart Contract Logic Exploit

A critical rounding error in Balancer's V2 Stable Pool logic allowed attackers to leverage flash loans for unauthorized, multi-million dollar asset depletion.

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→On-Chain Arbitrage

→Oracle Manipulation

→Flash Loan Attack

Lending Protocol Moonwell Exploited via Faulty Oracle Price Feed Manipulation

A critical oracle feed error allowed an attacker to leverage flash loans, artificially inflating collateral value and draining $1 million from Moonwell lending pools.