Flash Loan

A type of uncollateralized loan in decentralized finance (DeFi) where a user can borrow assets without providing any collateral. Made mainly for using for faster transactions, arbitrage trades where loan is paid back within seconds or sometimes one blockchain transaction.

What You Need To Know

Flash loans are a groundbreaking innovation in decentralized finance, offering instant access to capital without collateral requirements. While they enable profitable strategies like arbitrage and debt refinancing, they also pose significant risks due to their potential for misuse in attacks on vulnerable protocols.