Definition ∞ Flash loans are a type of uncollateralized loan in decentralized finance that must be borrowed and repaid within a single blockchain transaction. These loans permit users to access substantial capital without providing upfront collateral. They are primarily used for arbitrage opportunities, collateral swaps, or self-liquidation. The atomic nature of these operations ensures either full repayment or transaction reversal.
Context ∞ Flash loans are frequently discussed in crypto news due to their association with complex arbitrage strategies and occasional protocol exploits. A significant debate concerns the security implications of these powerful tools, particularly their use in manipulating on-chain markets. Future developments may include more robust security measures for protocols offering flash loans and enhanced detection of malicious uses.
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