#DeFiBreakdown 7 - Flash Loan.
20 Aug 2022, 06:25
#DeFiBreakdown 7 - Flash Loan š
Flash Loan is defined as a form of #cryptocurrency-backed lending w/ no collateral required, providing a way to get funding quickly without the hassle of a traditional lending process, helping maintain financial efficiency within #DeFi ecosystem.
It's the nature of smart contracts that makes it possible for unsecured loans and enables transactions to revert automatically before the block confirms.
Flash loans may be a useful and powerful tool for arbitrage and quick trades; however, when hacked, they can also be used to exploit any vulnerable #DeFi protocol.
The concept of uncollateralized loans is raising eyebrows and causing many to wonder about its security. But, ultimately, #DeFi grows as a space, we hope to see a considerable rise in innovative new applications and platforms such as Flash Loan.
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