What are flash loans in crypto

[smithtaylor]

Instant Loan Execution: Flash loans are a type of loan in the crypto world that are executed instantly within a single blockchain transaction, without requiring collateral.


No Collateral Needed: Unlike traditional loans, flash loans do not require the borrower to provide any collateral, making them unique in the financial space.


Atomic Nature: The entire process of borrowing and repaying the flash loan happens in a single transaction. If the loan isn’t repaid within that transaction, the entire process is reversed, ensuring the lender faces no risk.


Arbitrage Opportunities: Flash loans are often used for arbitrage, allowing traders to take advantage of price differences across different exchanges without needing upfront capital.


Smart Contracts: These loans rely heavily on smart contracts, which automatically enforce the terms of the loan, ensuring that the borrower must meet all conditions within the same transaction.



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[roxoy]

Flash loans are instant, uncollateralized loans executed in a single blockchain transaction. They allow traders to exploit price differences across exchanges without upfront capital. The entire loan process happens in one transaction; if it isn’t repaid, the transaction is reversed, so the lender faces no risk. These loans rely on smart contracts to automatically enforce their terms. If you're interested in understanding more about innovative crypto opportunities, you might also want to explore upcoming crypto presale.