Flash Loans

Flash Loans are special transactions that allow users to borrow an asset for a single block, provided they repay the borrowed amount and a fee within that same block time. Sometimes these actions are also referred to as “One Block Borrows.” Flash Loans do not require any collateral upfront. There is no direct real-world analogy to Flash Loans, so it requires some basic understanding of how state is managed within blocks in blockchains.

There are tools allowing users to utilise Flash Loans to access liquidity in the background for advanced features such as repay with collateral, collateral switch, and more.

Example interfaces that integrate Flash Loans are DeFi Saver, Instadapp, and Furucombo.

Flash Loans let users borrow from a pool’s reserves (if borrowing is enabled) for one transaction, provided they repay the amount taken plus a fee (0.07% in Aave V2, 0.05% in Aave V3) or open a borrow position within the same transaction.

Due to the technical knowledge required to execute a Flash Loan, the feature is designed for developers. To do a Flash Loan, users will need to build a contract that requests a Flash Loan. For more information on integrating flash loans, see the developers' guide.