Flash Loans

Flash loans are uncollateralized loans that must be borrowed and repaid within a single transaction. If the loan isn't repaid, the entire transaction reverts as if it never happened. This zero-risk lending enables: arbitrage (exploit price differences across DEXs), collateral swaps (change your loan collateral without closing the position), and self-liquidation. Aave pioneered flash loans in 2020. While they enable efficient markets, they've also been used in attacks — manipulating oracle prices for exploits.