✅ Master Flash Loan Mechanics
Understand atomic transactions, use cases, and security risks
Borrow millions with no collateral in seconds
Your Progress
0 / 5 completed🎓 Key Takeaways
Let's review everything you've learned about flash loans - from fundamentals to security considerations.
💡 Flash Loan Fundamentals
- •Uncollateralized: No collateral required - atomicity guarantees repayment
- •Instant Execution: Borrow, use, and repay in single transaction (15 seconds)
- •Atomic Transactions: All-or-nothing - if repayment fails, everything reverts
- •Tiny Fees: 0.05-0.09% makes large capital accessible cheaply
- •Smart Contract Required: Must implement callback function to execute logic
⚙️ Technical Mechanics
- •4-Step Flow: Request loan → Execute callback → Repay loan + fee → Complete
- •Callback Function: executeOperation() contains your arbitrage/liquidation logic
- •Atomicity Guarantee: Lenders have zero risk - funds never leave if not repaid
- •Top Providers: Aave (0.09%), dYdX (0.05%), Balancer (0.05%), Uniswap V3
- •Gas Costs: Complex strategies can cost $100-500+ in gas fees
📊 Use Cases
- •DEX Arbitrage: Exploit price differences across exchanges - most common use case
- •Liquidations: Liquidate undercollateralized positions, earn 5-15% bonus
- •Collateral Swapping: Change loan collateral without closing position
- •Self-Liquidation: Liquidate yourself before others do, keep bonus
- •Debt Refinancing: Move debt to better rates without capital
⚠️ Security Considerations
- •Reentrancy Attacks: Use guards on all external calls (OpenZeppelin)
- •Oracle Manipulation: Never use spot prices - use TWAP or Chainlink
- •Governance Attacks: Snapshot voting power, implement time-locks
- •Major Exploits: $182M Beanstalk, $130M Cream, $200M PancakeBunny
- •Best Practices: Security audit, bug bounty, circuit breakers, testing
📝 Knowledge Check Quiz
Test your understanding of flash loans. You need 3/5 correct to pass.