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What Is the Primary Risk to the Lender in a Flash Loan Transaction?

The risk is a smart contract bug or exploit, not the borrower defaulting, due to atomic execution.
Greeks.Live20.11.25

What Is the Primary Risk to the Lender in a Flash Loan Transaction?

The primary risk to the lender is not default, as the transaction is atomically executed and reverts if the loan is not repaid. The risk lies in the smart contract code of the lending protocol itself.

If there is a bug or vulnerability in the flash loan contract, an attacker could exploit it to drain the liquidity pool. The economic risk of non-repayment is zero, but the technical risk of a smart contract exploit is the main concern.

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