Definition ∞ A Flash Loan Exploit is a type of decentralized finance (DeFi) attack that leverages flash loans to manipulate asset prices or protocol logic. A flash loan allows a borrower to acquire a large sum of cryptocurrency with no upfront collateral, provided the loan is repaid within the same transaction block. Attackers use these loans to execute complex sequences of trades or contract interactions that result in the theft of funds from a protocol.
Context ∞ Flash loan exploits are a persistent concern within the DeFi ecosystem, frequently resulting in substantial financial losses for vulnerable protocols. Security researchers and developers are actively working on preventative measures, including enhanced transaction validation and reentrancy guards, to counter these sophisticated attack vectors.
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