# Problems handled by Proxy Network

**Flashloans.** Loans that have to be paid back in the same block they are taken. Can be used maliciously to extract money from Smart contracts. One way to utilize those loans, for example, is to trade big amounts and cause on-chain liquidations.

**Exchange hacks.** Both centralized and decentralized exchanges can be hacked, and the stored funds can be extracted.\
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**Wallet hacks.** Holding the user’s funds, wallets are a massive target for hackers. Security leaks can lead to hackers gaining access to user’s funds.

**Token minting.** Some token contracts have a minting functionality, which means that new tokens can be created. This can be used by hackers to mint new tokens and sell them.\
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**Intentional “rug-pulls”.** The team itself pulling liquidity, minting new tokens, dumping their tokens, or similar, can also be an issue.

By examining the major crypto hacks that took place over the last year, we can draw some key learnings that bear valuable insights, helping protect investors in the crypto space.

In summary, the DeFi space has great potential as it enters the official mainstream, with institutions becoming major players in this market. The premise for this prediction is that retail investors, as well as institutions, learn from the painful lessons that the 2020 hacks taught us.

Otherwise, they will become the targets of cyber-attacks that will bear catastrophic consequences, indirect financial loss, reputational damage, and loss of goodwill.


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