  Credit allows a lender to loan out surplus capital to a borrower. In the
traditional economy, credit bears the risk that the borrower may default on its
debt, the lender hence requires upfront collateral from the borrower, plus
interest fee payments. Due to the atomicity of blockchain transactions, lenders
can offer flash loans, i.e., loans that are only valid within one transaction
and must be repaid by the end of that transaction. This concept has lead to a
number of interesting attack possibilities, some of which were exploited in
February 2020.
  This paper is the first to explore the implication of transaction atomicity
and flash loans for the nascent decentralized finance (DeFi) ecosystem. We show
quantitatively how transaction atomicity increases the arbitrage revenue. We
moreover analyze two existing attacks with ROIs beyond 500k%. We formulate
finding the attack parameters as an optimization problem over the state of the
underlying Ethereum blockchain and the state of the DeFi ecosystem. We show how
malicious adversaries can efficiently maximize an attack profit and hence
damage the DeFi ecosystem further. Specifically, we present how two previously
executed attacks can be "boosted" to result in a profit of 829.5k USD and 1.1M
USD, respectively, which is a boost of 2.37x and 1.73x, respectively.
