@helpers
Flash loans are a type of uncollateralized loan in decentralized finance (DeFi) that allow users to borrow assets instantly without requiring collateral, under the condition that the loan is repaid within the same transaction. They are used for arbitrage, refinancing, and collateral swapping, enabling traders to capitalize on price discrepancies without upfront capital. While flash loans offer flexibility, they also pose risks. Malicious actors can exploit vulnerabilities in smart contracts, using flash loans to manipulate prices or exploit flaws for profit, as seen in some DeFi hacks. Additionally, flash loans can increase market volatility and contribute to systemic risks in the DeFi space if misused, affecting the overall stability of platforms.
0 reply
0 recast
0 reaction