What Is a Flash Loan Attack — and How Do I Prevent It?

The way people view and use cryptocurrencies has changed a lot since the development of decentralized finance (DeFi), especially with independent financial platforms offering different types of crypto lending, which in turn provides a lot of value to both borrowers and lenders.

One such loan type that has surged in popularity in the DeFi ecosystem is the flash loan, as it allows borrowers to benefit from arbitrage opportunities quickly. It provides the borrowed funds to purchase a crypto asset, sell it, pay back the loan and make a profit.

Unfortunately, while the idea is excellent and works well, there are those who exploit this form of lending. Keep reading to learn more about flash loan attacks — and how to prevent them.