What Is a Flash Loan and How Does It Enable a Price Feed Attack?

A flash loan is a type of uncollateralized loan that must be borrowed and repaid within the same blockchain transaction. This allows an attacker to borrow a massive amount of capital without any upfront collateral.

The attacker uses the borrowed funds to execute a large trade on a DEX, causing a temporary, significant price deviation. The manipulated price is then fed to the vulnerable smart contract by the oracle, enabling the attack before the flash loan is repaid and the transaction is finalized.