Day 21: Flash Loans and Uniswap Arbitrage: An Instantaneous Profit Play
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“In a world where opportunities manifest in the blink of an eye, flash loans are the tools of the swift and the brave.” — DeFi Enthusiast
A Technical Dive: The Mechanics of Flash Loans
“In the world of blockchains, time and transactions are fluid; Flash loans make us question what’s possible within a single transaction.”
Introduction
Flash loans have been a buzzword in the DeFi space. They revolutionized the way we think about loaning and borrowing in the blockchain universe. Instead of lengthy credit checks or collateral requirements, all you need is a smart contract and a strategy. But how does this work technically? Let’s plunge deep into the mechanics of flash loans.
The Basics of a Flash Loan
At its core, a flash loan is a type of loan that allows a user to borrow a specific amount of cryptocurrency without collateral on the condition that the loan is repaid within the same transaction block. If it’s not repaid, the transaction fails, and it’s as if it never happened.
