What Is a Flash Loan and How Can It Be Used to Amplify a Reentrancy Attack?

A flash loan is a type of uncollateralized loan that must be repaid within the same transaction block. An attacker can use a massive flash loan to acquire a large amount of cryptocurrency, which is then used to maximize the funds available for the reentrancy attack.

The larger the initial capital, the more significant the drain on the vulnerable contract. The entire sequence, including the attack and repayment, occurs atomically in one transaction.