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Home/Glossary/Flash loan
DeFi

Flash loan

In shortAn uncollateralized loan that must be borrowed and repaid within a single blockchain transaction.

If the money isn't returned by the end of the transaction, the whole transaction is cancelled as if it never happened. Flash loans are used for arbitrage and refinancing — and in many exploits, because they give anyone huge capital for a moment.

← FinalityAll terms A–ZFOMO (fear of missing out) →

Related terms

  • Exploit (hack)An attack that abuses a bug in code or a weak setup to steal funds from a protocol, bridge or exchange.
  • ArbitrageProfiting from the price difference of the same asset on two markets by buying low on one and selling high on the other.
  • DeFi lendingLending crypto for interest, or borrowing against your crypto, through smart contracts.
  • OracleA service that brings outside data — such as prices — onto the blockchain for smart contracts to use.
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