Flashloan

In a single block, borrow capital and return it with an additional fee

Overview

All assets in Bancor v3 can be borrowed using flash loans. A flash loan is a Web 3 innovation giving anyone access to vast amounts of capital for a single transaction, while using the blockchain to guarantee that the funds are all returned (in addition to a fee).

A slightly more technical definition is that the flash loan only executes if it is returned along with the fee in the same transaction that it is borrowed, otherwise it reverts. This can be difficult to understand at first, both because it has no parallel in the traditional finance world, and because it involves an understanding of how blockchain transactions work.