Flash Loan Attack

A Flash Loan Attack is a sophisticated exploit in Decentralized Finance (DeFi) where an attacker uses an uncollateralized loan, which must be borrowed and repaid within a single, atomic blockchain transaction, to manipulate asset prices or exploit smart contract vulnerabilities, often resulting in the theft of millions of dollars from a protocol. These attacks leverage the composability and speed of DeFi to execute complex, high-value exploits that are impossible in traditional finance, primarily targeting faulty price oracles or flawed contract logic.