flash-loan

Flash Loan Attack Playbook

Flash loans give the attacker uncollateralized capital for a single transaction. They're not vulnerabilities themselves — they're a force multiplier for existing bugs. Sources: Aave, Balancer, Uniswap V2/V3, Maker, dYdX (deprecated).

Common attack patterns

1. Oracle amplification (most common)

Use loan to push a price, then trigger price-dependent action. Cross-reference: see oracle-manipulation/SKILL.md.

2. Unauthenticated callback handler

function executeOperation(
    address[] calldata assets,
    uint256[] calldata amounts,
    uint256[] calldata premiums,
    address initiator,                     // ← UNVALIDATED in many contracts
    bytes calldata params
) external returns (bool) {
    // Anyone can call this with fake `initiator`
    // and have the contract do whatever the params say
}

Bug: initiator and msg.sender == pool checks are missing. Attack: call executeOperation directly with no actual loan, malicious params → contract does the operation anyway.

3. Governance attack via flash loan

// Vulnerable governance:
function propose() external {
    require(getVotes(msg.sender) > THRESHOLD);
    // ...
}
function getVotes(address user) public view returns (uint256) {
    return token.balanceOf(user);  // ← reads SPOT balance, not snapshot
}

Attack: flash-loan governance tokens, propose malicious change (e.g., upgrade contract to drain), vote with the loaned tokens, execute, repay loan. MakerDAO had this pattern; mitigated by checkpoint-based voting.

4. Liquidity manipulation

Pool that uses totalSupply() or balanceOf(pool) for share math:

function deposit(uint256 amt) external {
    uint256 shares = (amt * totalSupply()) / underlying.balanceOf(address(this));
    _mint(msg.sender, shares);
    underlying.transferFrom(msg.sender, address(this), amt);
}

Attacker:

1. Flash-loan and deposit (becomes 99% of pool)
2. Donate underlying to inflate underlying.balanceOf artificially
3. Next depositor's shares = amt * totalSupply / inflatedBalance ≈ 0
4. Withdraw → drain This is the ERC4626 inflation attack (also covered in reentrancy/ overlap).