Flash Loan
An uncollateralized loan that must be borrowed and repaid within a single blockchain transaction.
Explained Simply
Flash loans are a DeFi innovation that lets you borrow any amount of cryptocurrency with no collateral, as long as you repay it in the same transaction. If the loan is not repaid, the entire transaction is reversed as if it never happened. Flash loans are used for arbitrage, liquidations, and collateral swaps. They have also been exploited in DeFi attacks where hackers manipulate prices across protocols. Flash loans demonstrate the programmable nature of DeFi — something impossible in traditional finance.
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