Crypto

Flash Loan Attack

Definition

A DeFi exploit that uses uncollateralized flash loans to manipulate asset prices, drain liquidity pools, or exploit protocol vulnerabilities — all within a single atomic transaction. If the exploit fails, the entire transaction reverts.

Example
Several high-profile DeFi protocols have suffered tens of millions in losses through flash loan attacks that exploited price oracle vulnerabilities.
Related Terms
AMM (Automated Market Maker) DeFi (Decentralized Finance) Flash Loan Liquidation (Crypto)
Frequently Asked Question
What is a Flash Loan Attack?
A Flash Loan Attack exploits DeFi protocols using large uncollateralized flash loans to manipulate prices or drain funds within a single transaction. The attack succeeds only if profitable within the same block.
APA Citation
Clark, R. (2025). Flash Loan Attack. VixShield Trading Glossary. Retrieved from https://www.vixshield.com/glossary/flash-loan-attack
RC
Russell Clark, FNP-C
Author of SPX Mastery series · Founder of VixShield
Last updated:  ·  Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.