Flash Loans

Pushing the limits of DeFi

Flash Loans

What are Flash Loans?

Flash Loans are the first uncollateralized loan option in DeFi! Designed for developers, Flash Loans enable you to borrow instantly and easily, no collateral needed provided that the liquidity is returned to the pool within one transaction block.

If this does not happen, the whole transaction is reversed to effectively undo the actions executed until that point. This guarantees the safety of the funds in the reserve pool. Use-cases include arbitrage, collateral swapping, self-liquidation, and many more.

Take a DAI Flash Loan
Close ETH MakerDAO Vault
Sell ETH for BAT
Open BAT MakerDAO Vault
Close the Flash Loan with the DAI

Flash Loan use case: Collateral swap of a MakerDAO Vault

0.09%

A Flash Loan fee is collected from the total loan amount

70%

Extra income for depositors

30%

This is split (80/20)

80%

Swapped to LEND & burned

20%

Reward to integrators

Zero collateral

Unlike DeFi’s staple overcollateralized loans, Flash Loans do not require any capital to get started, lowering the barrier to entry and making them an extremely useful tool for everyone.

Changes in the fee structure will be subject to the Aave protocol governance.

Got you excited?

Read our documentation and start using Flash Loans yourself!