Flash Loan

Characteristics of Flash Loans

Flash loans allow borrowers to access substantial funds without the need for collateral. The distinguishing feature of a flash loan is that the borrowed amount, along with any accrued interest and fees, must be repaid within the same blockchain transaction.

Mechanism of Flash Loans Usage

To utilize a flash loan, one must develop a smart contract that automates the borrowing process. This contract is programmed to request the loan, deploy the funds according to the borrower's strategy, and ensure that repayment occurs instantaneously within the same transaction. This requires a deep understanding of blockchain technology and smart contract development.