MakerDAO issues warning after a flash loan is used to pass a governance vote

Quick Take

  • A MakerDAO governance vote was passed earlier this week with the use of a flash loan by an outside party that wanted its proposal passed
  • The event has highlighted again the impact flash loans can have on DeFi protocols

The team behind a DeFi protocol wanted white-list access to MakerDAO’s price oracle. And to make it happen, they used a flash loan to manipulate a vote in a process that has triggered questions about the stablecoin platform’s governance apparatus.

The complicated nature of the situation was detailed in a forum post on Wednesday. It’s a notable example of flash loans, or lending arrangements that play out across a single Ethereum transaction, can lead to unexpected outcomes and create security quandaries across the largely experimental DeFi landscape.<