Historical retrospective · DeFi
Aave flash loans made atomic borrowing a DeFi building block
Aave flash loans let a smart contract borrow assets without upfront collateral if the loan is returned with its fee within the same transaction.
Atomic repayment allowed developers to compose arbitrage, refinancing and liquidation operations that would be difficult with traditional settlement timing.
The feature became a distinctive example of programmable finance, where a transaction can include a temporary loan and its settlement.
Flash loans are a tool, not an exploit by definition; vulnerabilities often arise when another protocol mishandles price or state assumptions.
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