secondary title
daily loan
Do you know how to get a bank loan? You can use credit loans (consumption records, work income, bank statements, etc.), you can use fixed assets (such as houses, cars, gold, etc.) or stocks as collateral, and then loan out. First, there needs to be an endorsement in essence; second, the loan usually takes a relatively long time, such as 1 day, 1 month, 1 year, 30 years, etc.
flash loan
flash loan
Flash Loan is translated as lightning loan. The name "Lightning" means that the repayment speed of the loan is very fast and the time limit is very short. How short is it? the time of a block. A rough estimate is 13 seconds.
For example, in the lending business of traditional finance, the time of one block includes multiple processes such as borrowing money, trading, and repaying money.
The requirement of flash loan is that all operations are packaged into one block and must be completed within one block, so it is necessary to understand the solidity programming language to edit all trading strategies and steps, and then start to act. If you don't use the program and operate it by hand, you can't do anything in more than ten seconds.
At this time, you will understand why flash loans do not require any credit endorsement or asset collateral. Because if a transaction cannot be completed within the block generation time, it will be directly judged as invalid, and the money (encrypted assets) will be returned in the same way. Like nothing ever happened. And if the program completes all the borrowing, trading, and repayment within one block time, for the platform that provides flash loans, you only do two actions of borrowing money and repaying the money, and the intermediate process does not need to be considered , Why did you go with the money.
secondary title
Operate with integrated policy tools
If the flash loan is just borrowed and repaid, it will only pay the loan fee and gas fee. There must be an arbitrage operation in the middle. Of course, it will be relatively troublesome to do without programming, but the key is strategy. Below I introduce a tool called: Furucombo.
The above is the relevant introduction. The summary is that if you have your own strategy and ideas, you can directly build building blocks and put your ideas into practice.
First, open furucombo.app on the web page.
Then, click the + sign above. The exchanges in the figure below appear. Then add one block by one, and the mouse can drag the blocks to change the order. (After each block is modified, remember to click SET, this is the most forgettable part in the actual operation)
Here's a strategy I came up with this afternoon.
To briefly explain, in the afternoon (16:14 at the specific time), I found that the price difference between TUSD and DAI is relatively large - between different platforms.
1. Initiate a flash loan of 10,000TUSD on Aave;
2. Exchange 9999TUSD to 10255.66941DAI on 1inch;
3. Exchange 10250DAI to 10249.86565TUSD on Curve;
4. Aave repayment - 10009 TUSD
Then click to execute the operation, the profit of such an operation is on the upper left of the picture: 5.67 DAI and 241.87 TUSD.
In the picture, the flash loan blocks appear in pairs, and I leave a little margin for each transaction step (for example, if you can use 10,000 TUSD, you can set it to 9999 TUSD, such as 10,255 DAI, only 10,250 are used).
Except for the gas fee, no other principal needs to be paid, and Aave’s flash loan fee is 0.09%, so borrowing 10,000 TUSD needs to be returned 10,009 TUSD. The intermediate profit covers the 9TUSD, so there is no need to pay it yourself.
It seems simple, but it is not easy. First of all, we must find the instantaneous price difference, and set up these modules before the price is equalized.
Under the same module settings now, I have already lost money, please see the picture below.
So at this moment, one operation will result in a loss of 15.34941TUSD.
The above is just an example, and there are many more high-level strategies and methods, which will be discussed later. The main task of this article is to introduce what flash loan is, why there is flash loan, and how to do it.
