Common Attack Vectors

Protect Your Web3 Project from Flash Loan Attacks

Flash loan attacks see attackers exploit smart contract logic using uncollateralized loans that are borrowed and repaid within a single transaction. These attacks can drain millions of dollars in seconds. Guardrail ensures that even the fastest and most complex attacks can be detected and stopped before damage is done.

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Mempool Simulation

Every incoming transaction is tested to detect predatory patterns.

Advanced Analysis

Sophisticated algorithms evaluate intent, not just simple rules

Runbook Integration

Predefined automated rules, such as pause triggers, give your protocol an added layer of resilience

What is a Flash Loan Attack?

A flash loan attack exploits DeFi's composability by borrowing massive capital without collateral, manipulating prices or protocol state within a single transaction, then repaying the loan before the block closes.

How flash loan exploit work

Borrow

The attacker takes out a flash loan from a lending protocol (e.g., Aave or dYdX) for a large sum of a token.

Manipulate

The attacker uses the borrowed funds to manipulate the price of the token on a DEX, often by selling or swapping large amounts to create a price imbalance.

Exploit

With the manipulated price, the attacker executes a secondary exploit, such as cashing out a large amount of a stablecoin from another protocol at a favorable, but artificially inflated, rate.

Repay

The attacker repays the original flash loan plus a small fee, all within the same transaction. The entire process takes a fraction of a second.

Why traditional smart contract audits miss flash loan attacks

Audits analyze isolated code. Flash loans exploit

live, multi-protocol interactions.

Attackers chain DeFi primitives across protocols in real-time from borrowing, manipulating, draining all in one transaction. These dynamic attack paths only exist post-deployment, where static audits can't see them.

Guardrail’s real-time monitoring protects against flash loan attacks

Attacks

The strongest defense against flash loan attacks is continuous monitoring of mempool and onchain activity. Guardrail detects malicious behavior before a transaction is confirmed, giving your team the ability to stop an exploit before it executes.

Detection: Early Warning for Onchain Threats

A real-time monitoring system analyzes every blockchain transaction. Suspicious patterns, such as a sudden flash loan followed by rapid price manipulation, can be flagged before the transaction is mined. This provides a critical early warning.

Prevention: Automated Protection in a Split Second

When a threat is detected, Guardrail enables immediate action through:

Transaction Blocking: Stop the malicious transaction from being executed.
Automated Pausing: Trigger a smart contract’s emergency pause function to freeze assets.
Instant Alerts: Notify the protocol team immediately so they can take manual action if needed.

Guards provide complete security coverage of every onchain

Pre-built Guards

Instantly set up ‘Guards’ for common attack vectors from our extensive blueprint library of 50+ ‘Guards’

Custom Guards

Custom monitoring for your unique protocol risks

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Frequently Asked Questions

Need more information?

Read our Docs

How do flash loan attacks affect DeFi protocols?

Flash loan attacks exploit vulnerabilities across DeFi protocols, often leading to drained liquidity pools, price manipulation, or stolen stablecoins. Guardrail prevents these attacks before transactions are confirmed.

Can smart contract audits alone stop flash loan exploits?

No. Audits check code before deployment, but cannot anticipate dynamic, multi-step attacks. Real-time monitoring is required to detect threats during live operations.

How does Guardrail detect flash loan attacks in progress?

Guardrail simulates mempool transactions in real time, analyzing patterns like sudden flash loans and rapid asset swaps. Suspicious transactions are flagged instantly.

What actions can Guardrail take during an active attack?

Guardrail can block malicious transactions, trigger emergency pause functions, and alert protocol teams immediately so funds remain secure.

What are the best practices for preventing flash loan exploits?

Best practices include combining thorough audits, strong governance, and real-time monitoring solutions like Guardrail to detect and stop complex, multi-protocol attacks.

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