About 2 months ago, the DeFi community became aware that flash loans were a thing. The idea around them was simple, borrow as much money as you want, provided you can return it back in the same transaction. If you don’t, then the transaction will fail to actually finish executing
One general problem with markets with low liquidity (amount of money) is that any large movements of money can artificially tank or rise the price . Flash loans + illiquid markets are very potent combo as we learn with bZx – a lending protocol launched a few weeks ago.