Flash Loan

A flash loan is an uncollateralised loan that must be borrowed and repaid inside a single blockchain transaction. If the borrowed amount plus the fee is not returned before the transaction ends, the whole transaction reverts and it is as though the loan never happened, so the lender takes no credit risk. Developers use flash loans for arbitrage between venues, for moving a debt position from one protocol to another, or for swapping collateral without spare capital. The same tool appears in attacks, because an attacker can momentarily control enormous sums to distort a thinly traded price feed or a token-weighted governance vote, which is why protocols rely on manipulation-resistant oracles.