What Is the Risk of a “Flash Loan Attack” on an Oracle?
A flash loan attack on an oracle occurs when an attacker borrows a massive amount of funds in a single transaction, uses them to manipulate the price of an asset on a single decentralized exchange (DEX), and then uses that manipulated price to exploit a vulnerable protocol before repaying the loan. If the oracle relies on that single, manipulated DEX price, the attack can lead to incorrect liquidations or arbitrage profits.