What Is the Primary Difference between a Flash Loan and a Traditional Margin Loan?

A flash loan is an uncollateralized loan that must be borrowed and repaid within the same atomic transaction. There is no risk to the lender because the transaction reverts if repayment fails.

A traditional margin loan is collateralized and requires the borrower to post assets upfront. It has a longer duration and exposes the lender to counterparty risk if the borrower defaults or the collateral value drops below the maintenance margin.