elducati / flashloan-solidity

Basic Sample Flash Loan Project

This project demonstrates a basic flash loan use case.

A flash loan is a special type of a loan where a borrower can borrow an asset as long as they return the borrowed amount and some interest before the end of the transaction. Since the borrowed amount is returned back, with interest, in the same transaction, there is no possibility for anyone to run away with the borrowed money. If the loan is not repaid in the same transaction, the transaction fails overall and is reverted.

This simple, but fascinating, detail is what allows you to borrow billions with no upfront capital or collateral, because you need to pay it back in the same transaction itself. However, you can go wild with that money in between borrowing it and paying it back.

Remember that all of this happens in one transaction 👀