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What do flash loans do that normal leverage doesn't? Am I correct in wondering whether this allows the unskilled or unlucky trader to ruin themselves a little m
by ISL 6y ago
What do flash loans do that normal leverage doesn't? Am I correct in wondering whether this allows the unskilled or unlucky trader to ruin themselves a little more quickly?
- bondarchuk 6y agoIf the transaction doesn't immediately (within the same block) result in enough profit to pay back the loan with interest, the loan is canceled altogether, i.e. basically it doesn't even happen. Then you only pay some gas fees for executing the smart contracts up to that point (which can be a few hundred bucks nowadays, I must say).
- exo762 6y agoMore than that. You can actually simulate your execution locally. So you should know if there is a possibility of making a profit even before you send the tx.
- jonmaim 6y agoFlash loans have to be repaid in the same block/transaction.