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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→Precision Loss Exploit

→Decentralized Exchange

→Financial Primitive Risk

KyberSwap Elastic Concentrated Liquidity Drained Exploiting Cross-Tick Precision Error

A critical rounding flaw in the AMM's tick mechanism permitted flash loan-backed price manipulation, causing double liquidity counting and massive asset extraction.

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→Asset Protection

→Risk Mitigation

→Security Posture

Lending Protocol Exploited via Oracle Mispricing on Base Network

An external oracle failure mispriced wrstETH collateral, allowing the attacker to borrow millions against negligible deposit value, compromising protocol solvency.

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→Lending Protocol Exploit

→Collateral Valuation

→Risk Mitigation

Lending Protocol Drained Exploiting Collateral Price Oracle Glitch

An external oracle mispriced a wrapped staked asset by 29,000,000%, allowing an attacker to over-collateralize and drain $1M.

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→DEX Pricing Mechanism

→Protocol Invariant Failure

→Validator Fund Freeze

Concentrated Liquidity DEX Drained by Critical Integer Overflow Vulnerability

A flawed overflow check in the AMM's liquidity calculation function allowed an attacker to mint phantom assets, draining $223 million.

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→V3 Architecture

→Liquidity Pool

→Fee Discrepancy

Lending Protocol Impermax V3 Drained by Collateral Fee Valuation Flaw

Flash loan attack exploited Impermax V3 collateral valuation logic, leveraging uncollected fees to create bad debt and drain $400,000.

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→Flash Loan Attack

→Smart Contract Logic

→Price Feed Failure

Lending Protocol Moonwell Drained via External Oracle Price Manipulation

Oracle malfunction on a liquid staking derivative allowed collateral to be overvalued, bypassing solvency checks for a $1.1M loss.

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→Token Price Volatility

→Smart Contract Insolvency

→Collateral Mispricing

Lending Protocol Moonwell Exploited via External Oracle Price Manipulation

A critical oracle failure mispriced collateral, enabling the attacker to leverage a minimal deposit into a $1.1 million insolvency event.

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→Lending Protocol

→Lending Protocols

→Price Feed Failure

Lending Protocol Drained via External Oracle Mispricing on Base Network

A faulty external price feed on a key collateral asset allowed for massive over-collateralization, leading to an unrecoverable debt cascade.

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→Collateral Valuation Failure

→Erroneous Price Data

→Smart Contract Vulnerability

DeFi Lending Protocol Drained Exploiting Erroneous Oracle Price Feed

A misconfigured Chainlink oracle erroneously priced wrstETH at $5.8M, enabling an attacker to deposit minimal collateral and drain $1M, leaving $3.7M in bad debt.