Are a new type of uncollateralized loans enforced by smart contracts, pioneered by Aave, one of the top lending protocols in DeFi.
Are a new type of uncollateralized loans enforced by smart contracts, pioneered by Aave, one of the top lending protocols in DeFi. There are traditionally two types of loans: secured loans, which require collateral, and unsecured loans, which don't. An example of an unsecured loan is when you borrow $2,000 from a bank. Some banks are willing to lend you that amount provided that you have a good track record of paying loans. Flash loans are essentially unsecured loans requiring no collateral, credit checks, or a limit to how much you can borrow provided that the borrower pays back the loan before the transaction ends. Otherwise, the smart contract itself reserves the transaction as if it never happened. In this latest attack, the hacker used the borrowed funds to buy enough voting power to push through a change that allowed them to steal from Beanstalk, the Ethereum-based stablecoin protocol. https://lnkd.in/e-G7Auvi