Category: Software

A flash loan is a sort of uncollateralized loan that allows a user to borrow assets without providing any prior collateral as long as the borrowed assets are paid back inside the same blockchain transaction. This type of loan is also known as a “single-transaction loan.” The decentralized finance ecosystem (DeFi) started by adapting traditional financial services, like lending and borrowing, exchanges, futures, and options markets, for use with blockchains. Hence, DeFi stands for “decentralized finance.” As the ecosystem evolved, fundamentally new services were established. These services are only conceivable because of the inherent characteristics of blockchain technology and the permissionless composability made available by applications that use smart contracts.