Is It Exploitation Season for DeFi?

Are two recent attacks taking advantage of "flash loans," low liquidity and price oracle issues the first of more to come?

By Nathaniel Whittemore

Feb 18, 2020 at 8:00 p.m. UTC

Updated Sep 13, 2021 at 12:19 p.m. UTC

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Nathaniel Whittemore

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Are two recent attacks taking advantage of "flash loans," low liquidity and price oracle issues the first of more to come?

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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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Nathaniel Whittemore

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Nathaniel Whittemore