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Crypto
Flash Loan
A loan on a blockchain that must be borrowed and repaid in the same transaction — no collateral needed if it’s paid back instantly.
Flash loans are only possible because everything happens atomically on the blockchain. If the repayment fails, the whole transaction is reversed as if it never happened. This makes them extremely powerful for advanced DeFi strategies but also risky if the code has bugs.
It's like borrowing a million pounds for 3 seconds, using it to make a profit, and giving it back before anyone notices you took it.
Real world: Traders use flash loans on Aave to arbitrage price differences between DEXes. They borrow millions, buy low on one exchange, sell high on another, repay the loan, and keep the profit — all in one blockchain transaction.
💡 Flash loans are one of the most powerful (and dangerous) tools in DeFi — use them carefully or lose everything.