What it means
A loan with no collateral that must be borrowed and repaid within the same transaction.
If the money isn't back by the end of the transaction, the whole thing is cancelled as if it never happened.
How it works
It's used for trading and refinancing, and sometimes in exploits.
Related terms
| Term | What it means |
|---|---|
| Lending market | An onchain pool where people supply money that others borrow, with the interest paid by borrowers going to those who supplied it. |
| Exploit | An attack that uses a bug or design flaw in a smart contract to take money from it. |
| Transaction | One action recorded on a blockchain, such as a payment, an exchange or a deposit. |
This glossary explains terms in general. It isn't investment, tax or legal advice.