flash-loan-attacks

Flash loan attacks manipulate DeFi oracles and governance by borrowing large capital atomically to skew asset prices or pass malicious proposals before repaying the loan. Attackers exploit protocols lacking snapshot-based voting or robust price feeds to drain liquidity pools.

The best way to prevent oracle manipulation is implementing TWAP oracles, using multi-source price feeds, and adding stale price protection. These defenses prevent attackers from artificially inflating or deflating asset values within a single transaction block.

Implement defense strategies against flash loan governance manipulation by adopting snapshot-based voting, enforcing voting delays, and requiring minimum proposal thresholds. These mechanisms prevent attackers from utilizing atomically borrowed tokens to instantly pass malicious governance decisions.

Separating deposit and borrow actions across multiple blocks stops flash loan attacks by breaking atomic execution. Implementing multi-block delays and robust slippage protections prevents attackers from manipulating liquidity pools within a single transaction.

Use TWAP oracles instead of spot price feeds whenever your protocol handles large capital deposits or borrows. TWAP oracles average prices over time, neutralizing liquidity manipulation tactics like price impact sandwiches that exploit instantaneous spot price discrepancies.