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What Is a Flash Loan and How Does It Facilitate Oracle Manipulation?

Borrow $xrightarrow{text{Manipulate}}$ Exploit $xrightarrow{text{Repay}}$ End (Atomic Transaction Cycle)
Greeks.Live20.11.25

What Is a Flash Loan and How Does It Facilitate Oracle Manipulation?

A flash loan is a type of uncollateralized loan that must be borrowed and repaid within the same blockchain transaction. They are facilitated by smart contracts.

The loan allows an attacker to instantly acquire a large amount of capital. This capital is then used to manipulate the price of an asset on a low-liquidity DEX, creating a temporary, artificial price spike or dip.

The oracle reads this manipulated price before the transaction concludes and the loan is repaid.

What Is the Risk of a “Flash Loan Attack” on a DEX Liquidity Pool?
How Do Flash Loan Attacks Exploit Smart Contract Vulnerabilities?
How Does the “Same Transaction” Constraint of a Flash Loan Limit the Attack Vector?
Explain the Concept of “Flash Loans” in DeFi

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