What is the Definition of Flash Loan?

A flash loan is a type of uncollateralized loan that must be borrowed and repaid within a single transaction block on a blockchain. If the repayment does not occur within the same transaction, the entire operation is reverted. These loans are primarily utilized in decentralized finance (DeFi) for arbitrage, collateral swaps, and other complex trading strategies. They represent a unique financial instrument enabled by smart contract capabilities.

What is the Context of Flash Loan?

Flash loans are a subject of frequent discussion due to their powerful utility in DeFi and their potential for facilitating sophisticated market operations, including certain types of exploits. Current debates often focus on their role in decentralized arbitrage and their implications for market efficiency. Concerns are raised about their use in executing complex attacks that can drain liquidity pools or manipulate asset prices. Future developments may involve introducing circuit breakers or other mechanisms to mitigate risks associated with their rapid execution.

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∞Flash Loan

∞Reentrancy

∞Minting Vulnerability

Bedrock uniBTC Protocol Exploited via Faulty Minting Logic

A critical flaw in Bedrock's uniBTC minting contract allowed attackers to exploit a 1:1 exchange rate with undervalued ETH, leading to significant asset drain.

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∞Protocols

∞Price Oracle

∞Smart Contract

Resupply Lending Protocol Exploited via ERC4626 Vault Exchange Rate Manipulation

A critical flaw in a newly deployed ERC4626 vault's exchange rate calculation allowed an attacker to drain $9.8 million by manipulating perceived collateral value.

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∞Liquidity Pool

∞Oracle Manipulation

∞Asset Drain

New Gold Protocol Drained $1.9 Million via Price Oracle Manipulation

A flash loan exploit leveraged a single-source price oracle, allowing an attacker to manipulate token value and drain assets.

∞Decentralized Exchange

∞Liquidity Pool

∞Price Manipulation

Bunni DEX Suffers $8.4 Million Flash Loan and Rounding Error Exploit

A subtle rounding error in a Uniswap v4-based DEX's withdraw function, when combined with flash loan and sandwich attacks, enabled disproportionate liquidity draining.

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∞Rounding Error

∞Precision Loss

∞Vulnerable Fork

Hundred Finance Suffers $7.4 Million Flash Loan and Precision Loss Exploit

A rounding error in an hToken contract, combined with low liquidity, enabled an attacker to manipulate exchange rates and drain millions via flash loans.

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∞Security Audit

∞Flash Loan

∞DeFi Exploit

Abracadabra Finance Suffers $13 Million Flash Loan Liquidation Exploit

A critical smart contract vulnerability in Abracadabra's lending cauldrons allowed flash loan manipulation, enabling unauthorized liquidation profit extraction.

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∞Validator Compromise

∞Flash Loan

∞Layer-2 Security

Shibarium Bridge Compromised: Flash Loan Seizes Validator Keys

A flash loan exploit manipulating governance tokens to seize validator control exposes critical Layer 2 bridge vulnerabilities, threatening asset integrity.

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∞Price Volatility

∞Smart Contract

∞Protocol Design

New Gold Protocol Suffers $2m Flash Loan Oracle Manipulation Exploit

A critical flaw in the protocol's price oracle and transfer logic enabled a flash loan attack, compromising $2 million and devaluing the NGP token by 88%.

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∞Systemic Risk

∞Governance Manipulation

∞On-Chain Forensics

Shibarium Bridge Compromised: Flash Loan Manipulates Validator Keys

A flash loan-enabled validator key compromise exposed critical L2 bridge vulnerabilities, enabling unauthorized asset exfiltration.

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∞Validator Keys

∞Flash Loan Exploit

∞Ecosystem Vulnerability

Shibarium Bridge Compromised via Flash Loan and Validator Key Control

A flash loan exploit manipulated governance tokens to seize validator control, enabling unauthorized asset drainage from the Shibarium bridge.

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∞Validator Compromise

∞Consensus Mechanism

∞Smart Contract

Shibarium Bridge Compromised by Flash Loan Validator Control Exploit

A flash loan attack exploited Shibarium's validator consensus, enabling a 2/3 majority takeover and draining significant assets, highlighting critical L2 bridge vulnerabilities.

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∞Multi-Signature

∞DeFi Exploit

∞Layer-2

Shibarium Bridge Validators Compromised, Millions Drained in Exploit

A critical vulnerability in Shibarium's validator key management enabled attackers to manipulate the bridge, leading to significant asset exfiltration.

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∞Flash Loan

∞Blockchain Bridge

∞Smart Contract

Shibarium Bridge Suffers $2.3 Million Validator Key Compromise

A flash loan attack exploited Shibarium's validator system, compromising signing keys and enabling unauthorized asset withdrawals, directly impacting user funds.

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∞On-Chain Forensics

∞Flash Loan

∞Bridge Exploit

Shibarium Bridge Compromised by Validator Key Manipulation via Flash Loan

A flash loan exploit manipulating governance token mechanics enabled attackers to seize validator control, exposing critical vulnerabilities in Layer 2 bridge security.

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∞BNB

∞Market Volatility

∞Unaudited Code

New Gold Protocol Suffers $2 Million Flash Loan Oracle Manipulation

A single-source price oracle vulnerability, exploitable via flash loans, allowed an attacker to manipulate asset valuation and drain liquidity, jeopardizing user capital.

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∞Blockchain Bridge

∞Validator Compromise

∞Layer-2 Security

Shibarium Bridge Compromised by Validator Key Control and Flash Loan Exploit

A critical governance flaw in the Shibarium bridge allowed an attacker to manipulate validator control via a flash loan, enabling unauthorized asset exfiltration.

∞Layer-2 Security

∞Blockchain Exploit

∞Decentralized Finance