Flash Loans

Flash loans are a type of uncollateralized loan in decentralized finance (DeFi) that must be borrowed and repaid within a single transaction. They allow users to access large amounts of liquidity instantly without providing collateral, enabling activities like arbitrage, refinancing, or collateral swapping. If the loan isn’t repaid during that transaction, the entire operation is canceled, ensuring lenders aren’t at risk. Essentially, it’s like borrowing a large sum for a momentary opportunity, executing multiple actions, and repaying immediately—all within a single blockchain transaction.