Flash Loan Voting Exploits

Flash Loan Voting Exploits occur when an attacker uses uncollateralized, instant loans to acquire a massive amount of governance tokens to manipulate a vote. Because the loan is repaid within the same transaction, the attacker incurs minimal capital risk while gaining temporary control over the protocol.

This can be used to pass malicious proposals, such as moving funds to an attacker-controlled wallet. These exploits have highlighted a major vulnerability in simple token-weighted voting systems.

To counter this, many protocols have moved to snapshot-based voting or delay mechanisms that require tokens to be held for a period before they can be used for voting. Understanding this exploit is critical for any protocol that uses on-chain governance.

It demonstrates how composability in DeFi can be turned against the protocol itself.