The latest craze in DeFi is flash loans. Here’s how they work.
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⚡ GONE IN A FLASH ⚡
Flash loans are one of the newest and most important innovations in decentralized finance (DeFi). They allow traders to borrow cryptocurrency without putting up collateral. They’re called flash loans because they’re paid back fast — instantly, in fact — and they give traders the leverage they need to make quick and dirty profits.
What could go wrong?
A lot, as it turns out.
Just ask bZx, a platform that lost close to $1 million last week to attackers who leveraged flash loans to make (or steal) cash instantly.
As a subscriber to our Markets Daily newsletter, you probably have a lot of questions about this esoteric frontier of finance. To get a handle on it, check out our plain-English guides to DeFi's new fount of rewards — and risk. |
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