Study Finds Flash Loan Attacks Drained $1.2 Billion From DeFi Between 2020 and 2024
(3 hours ago) · 1 source · Summarized by CryptoBipto
A study reports that flash loan attacks resulted in approximately $1.2 billion in losses across decentralized finance protocols between 2020 and 2024. The research highlights the persistent security risks associated with this type of exploit in the DeFi ecosystem.
WHY IT MATTERS
In traditional banking, you typically need collateral — something of value you put up as a guarantee — to take out a loan. In decentralized finance (DeFi), a special type of loan called a "flash loan" lets someone borrow a huge amount of cryptocurrency with no collateral at all, as long as they pay it back almost instantly, within the same transaction. Think of it like borrowing a library book that you must return before you leave the building. Attackers have found ways to use these instant loans to manipulate prices and trick DeFi protocols into giving up funds. The fact that $1.2 billion was lost this way over five years shows that while DeFi offers new financial tools that anyone can use, it also comes with significant security risks that are still being addressed.
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- decrypt.co
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