Flash loan

A loan offered by a DeFi protocol that requires no collateral because it must be borrowed and repaid, with a fee, within the same transaction. If repayment fails, the entire transaction reverts as if it had never happened. Flash loans are used for arbitrage, liquidations and refinancing, and also in attacks, for example to manipulate prices or governance votes with borrowed capital.

For investigators, a flash-loan operation is contained in a single transaction made of many internal transactions. The amounts borrowed are not the operator’s own funds and should be distinguished from the net profit, which is what actually leaves the transaction.