Turning $0 into $300,000 With Flashloans

2 years ago
13

Flash loans. How to trade crypto. Leverage and margin trading.
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So, you might be asking yourself “Why would anyone borrow millions of dollars if they have to give it back in 10 seconds?” And the answer is profit...

This is what makes markets efficient. Here’s how arbitrage could work in crypto.. if Solana is $160 on KuCoin but it’s only $157 on Coinbase, depending on fees, you could profit off of this price discrepancy
Flash loans allow you to do this without ever actually buying Solana
A second reason for flash loans is collateral swaps.

This would make a traditional banker’s head spin. In order to borrow an asset you need collateral. Something worth money, that shows you’re good for your loan.

In regular finance collateral is fairly fixed. If you borrow $100,000 against your house you can’t easily decide tomorrow that you’d rather switch and borrow against the pile of gold you conveniently own instead.

You would need to go through a lengthy refinancing process and get the proper approvals. With a flash loan you are actually able to swap out your collateral on a loan for another asset all within a single 10 second transaction.

Flash loans
Crypto trading
Leverage trading
Margin trading

Timestamps:
0:00 Intro
0:39 Wild World of Flash Loans
1:44 $300,000 in Seconds
2:12 Flash Loan Use Case 1
3:26 Flash Loan Use Case 2
4:41 The Risks and Problems
6:29 When Flash Loans Go South
8:08 3rd Largest Hack in DeFi
9:05 Should You Do This?
9:55 Offer
10:28 You Need to Watch This

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*I am not a financial advisor. This is not financial advice*

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