A flash loan is a type of uncollateralized loan offered in the decentralized finance space that must be borrowed and repaid within the same transaction. If repayment fails, the entire transaction is reversed, ensuring that the lender does not lose funds.
This innovative financial instrument allows users to execute complex arbitrage, liquidity provision, or other strategies without requiring upfront collateral.
Flash loans are a powerful tool in DeFi but carry inherent risks due to their fast-paced and automated nature.
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