Let’s talk about flash loans.
The borrowed funds and fees must be returned to the liquidity pool before the transaction ends; otherwise, the entire transaction is reverted as if it never happened.
To be honest, I hadn’t noticed this before either: when evaluating a protocol, check where its price comes from. Protocols that rely on the spot price of a single DEX pool are more vulnerable to flash loan attacks.
The lending protocol behind $AAVE , Aave, supports flash loans.
Every kind of yield comes with its own risks, so understand the worst-case scenario first.
The borrowed funds and fees must be returned to the liquidity pool before the transaction ends; otherwise, the entire transaction is reverted as if it never happened.
To be honest, I hadn’t noticed this before either: when evaluating a protocol, check where its price comes from. Protocols that rely on the spot price of a single DEX pool are more vulnerable to flash loan attacks.
The lending protocol behind $AAVE , Aave, supports flash loans.
Every kind of yield comes with its own risks, so understand the worst-case scenario first.