@maximilian13e
How Do Flash Loans Work in DeFi?
Flash loans are uncollateralized loans in DeFi that must be repaid within a single transaction. Platforms like Aave allow traders to borrow funds instantly for arbitrage, liquidation, or leverage trading. If the loan isn’t repaid within the block, the transaction is reversed. While flash loans offer opportunities, they have been exploited in price manipulation attacks. Security measures, such as improved oracle pricing, help prevent abuses.
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