DeFi loans allow borrowers to access credit without the need for traditional financial intermediaries, such as banks. Borrowers and lenders can interact directly through a decentralized platform, often using cryptocurrency as collateral or as repayment. One of the advantages of DeFi loans is that they can be accessed by anyone with an internet connection, regardless of their credit history or location.

What is a flash loan?

A flash loan is a type of decentralized finance (DeFi) loan that is designed to be completed in a single transaction and typically does not require collateral. One of the main characteristics of flash loans is that they must be repaid in the same transaction in which they are taken out.

What is arbitrage flash loan?

Arbitrage is the practice of buying an asset at a low price in one market and simultaneously selling it at a higher price in another market. With flash loans, traders can take advantage of these price differences without having any existing assets. Instead, they can use a flash loan to instantly borrow a large amount of money, which they can then use to buy the asset in the lower-priced market and sell it in the higher-priced market.

Decentralized Finance is generally accepted to be the products and services on the blockchain that mirror the traditional finance industry. DeFi is facilitated through self-executing code, aptly named smart contracts, without the use of intermediaries.