Flash loans are the first uncollateralized load options in DeFi which enable users to borrow instantly with a click of a button. It requires no collateral to be deposited by the user and allows to borrow any amount up to the total liquidity available in the protocol.
The diagram reflects upon collateral swapping that helps in preventing liquidations. This is a process in which collateral can be replaced by another asset by using flash loans. To know more about Flash Loans and its uses-cases, access our TradeDog Insight Report in which you will find:
- Report Overview
- Types of Loans offered by Traditional Finance
- Decentralized Finance
- Introduction to Flash Loans
- Top Platforms