Flash Loans are unusual transactions that allow users to borrow assets for the duration of a single blockchain block, provided the borrowed amount and a fee are repaid within the same block. These transactions, sometimes called "One Block Borrows," require no upfront collateral. The concept of Flash Loans is specific to blockchain technology and has no direct equivalent in traditional finance, as it relies on how state is managed within blockchain blocks.
Flash Loans can be used as a liquidity tool for advanced operations like debt repayment using collateral, collateral switch, and more.
This feature allows users to borrow from the reserves of a pool (if flash loan borrowing is supported) for a single transaction, provided that the borrowed funds are returned plus a small fee, or a borrowing position is opened within the same transaction.
Flash Loans are primarily designed for developers due to the technical expertise required. To execute a Flash Loan, users must create a custom smart contract to request and manage the loan. For details on implementing Flash Loans, refer to the developer documentation.
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