Are two recent attacks taking advantage of "flash loans," low liquidity and price oracle issues the first of more to come?
Part of what makes decentralized finance, or DeFi, interesting to people is how it takes advantage of open-source protocols to enable types of transactions never before available. The problem, however, is financial structures mean new financial vulnerabilities.
In the last few days, two attacks on bZx have used a similar strategy of manipulating the price of synthetic assets in the context of a new instrument called "flash loans." On this episode, @nlw breaks down exactly:
- How the attacks were carried out
- How the community is responding
- What the larger ramifications for DeFi might be
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