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Flash Loans

Cryptocurrency and Digital AssetsUpdated 13 Nov 2026

Flash loans are covered in full under Flash Loan, which explains how they work, what they are used for and the risks they create. This page gives a short definition and points to related entries.

A flash loan is a loan offered by a smart contract that needs no collateral and no credit check, because it must be repaid, with a small fee, before the transaction that created it ends. If the money is not returned, the blockchain undoes every step of the transaction, so the lender never takes a loss. The feature became popular on Ethereum in 2020 and is offered by several decentralized finance protocols. Traders use flash loans to capture price gaps between exchanges, a strategy described under flash loan arbitrage, and to swap collateral or refinance debts in a single step.

The plural form is simply the way many crypto glossaries list the term. Because flash loans put very large sums in anyone's hands for a few seconds, they have also been used in exploits against protocols with weak price feeds or governance, which are covered under flash loan attack. One lending platform's implementation is described in detail under flash loans on Aave.

Last updated 13 Nov 2026