I am a beginner to learn cryptocurrency vulnerabilities. How flash loan attack is possible? Doesn't there some limit to getting a tremendous amount of flash loans?
How flash loan attack is possible?
The process of a flash loan attack typically involves these steps:
Flash Loan Borrowing: The attacker borrows a considerable amount of funds from a lending pool. This loan is provided instantly and without any collateral requirement.
Performing the Attack: With the borrowed funds, the attacker utilizes various approaches to manipulate the market.
Loan Repayment: To execute a successful flash loan attack, the entire borrowed amount, along with any fees, must be repaid within the same transaction. If the repayment doesn't occur, the entire transaction is reversed, and the attack fails.
Doesn't there some limit to getting a tremendous amount of flash loans?
Usually not. The point of flash loans is to offer an unlimited amount of funds for users. There probably is a platform that limits the funds to be lent, but usually, you can borrow as many funds as the pool holds.
I recommend you to read this article for more information.