Flashloans

Basics of Flashloans

Process for Flashloans

A flashloan is a type of uncollateralized loan that enables users to borrow a large amount of funds without putting up any collateral, as long as the funds are repaid within the same transaction.

Flashloans allow users to borrow funds for a short period, which could be as short as a few seconds and use them to execute profitable trades, liquidate positions, or perform other complex financial operations within the DeFi ecosystem. After the transaction is executed, the loan amount, along with any interest or fees, is returned to the lender.

Flash loans have gained popularity due to their flexibility and accessibility, and they have opened up new opportunities for DeFi users to maximize their returns and execute sophisticated trading strategies without needing large amounts of capital upfront.