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⚡ Flash Loans: Instant Uncollateralized Lending

Learn how to borrow millions without collateral in a single transaction

Borrow millions with no collateral in seconds

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⚡ What are Flash Loans?

Flash loans are uncollateralized loans that must be borrowed and repaid within the same blockchain transaction. If you can't repay, the entire transaction reverts as if it never happened. No credit check, no collateral required.

🔑 Key Characteristics

đŸšĢ

No Collateral Required

Borrow millions without putting up any funds upfront. The transaction atomicity guarantees repayment or reversion.

⚡

Instant Execution

Everything happens in a single transaction - borrow, execute strategy, and repay - all within seconds.

↩ī¸

Atomic Transactions

If any step fails (including repayment), the entire transaction reverts. No risk to lenders, no debt for borrowers.

💰

Tiny Fees

Protocols charge 0.05-0.09% per flash loan. Borrow $1M for just $500-$900 in fees.

💸 Flash Loan Profit Calculator

Calculate potential profits from a flash loan arbitrage or liquidation. Adjust loan amount, fees, and expected profit.

$100,000
0.09%

Aave: 0.09%, dYdX: 0.05%, Balancer: 0.05%

$5,000
Flash Loan Fee
$90
0.09% of $100,000
Total Repayment
$100,090
Loan + Fee
Net Profit
$4,910
4.91% margin
✓ Profitable Trade

After paying $90 in fees, you keep $4,910 profit. This trade makes sense!

💡 Tip: Flash loans are only profitable when your arbitrage/liquidation gains exceed the loan fee + gas costs. Typical profitable opportunities: 0.5-3% profit margins.

How Flash Loans Changed DeFi

🌍

Democratized Arbitrage

Anyone can execute large arbitrage trades without capital. Before flash loans, you needed millions to profit from price differences across exchanges.

⚡

Instant Liquidity

Protocols can access unlimited liquidity for liquidations, collateral swaps, or refinancing - all without requiring users to deposit funds.

🔄

Market Efficiency

Flash loans enable instant price corrections across DeFi. Arbitrageurs exploit inefficiencies within seconds, keeping markets balanced.

✅ Advantages

  • â€ĸZero Capital: Execute million-dollar strategies with $0
  • â€ĸNo Risk: Transaction reverts if unprofitable
  • â€ĸLightning Fast: Borrow, profit, repay in seconds
  • â€ĸPermissionless: Anyone can use them with smart contract skills

⚠ī¸ Challenges

  • â€ĸTechnical Barrier: Requires smart contract programming
  • â€ĸCompetition: Bots execute faster than humans
  • â€ĸGas Costs: Complex transactions can cost $100-500+ in fees
  • â€ĸAttack Vector: Used in many DeFi exploits (reentrancy, price manipulation)