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What is Flash Loan?
Crypto Glossary Definition
An uncollateralized loan that is both created and destroyed within a single transaction. Can be used by developers to exploit a system or capitalize on arbitrage opportunities.
Why Flash Loan Matters
A flash loan lets a borrower take out an uncollateralized loan and repay it within the same blockchain transaction — if it isn't repaid by the end of that transaction, the entire loan is automatically reversed. They're a legitimate DeFi tool, but they've also been the mechanism behind several high-profile exploit attacks on lending protocols.
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