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What Is a ‘Flash Loan’ and How Is It Used for High-Capital, Single-Transaction Arbitrage on DEXs?

Flash loans are zero-collateral loans that exist for one transaction, enabling massive arbitrage with zero starting capital.
Greeks.Live23.11.25

What Is a ‘Flash Loan’ and How Is It Used for High-Capital, Single-Transaction Arbitrage on DEXs?

A flash loan is a unique feature in decentralized finance (DeFi) that allows a user to borrow a very large amount of cryptocurrency with no upfront collateral. The critical condition is that the loan must be borrowed and repaid within the same blockchain transaction.

Arbitrageurs use flash loans to borrow massive capital, execute a multi-step arbitrage trade across different DEXs, and then repay the loan with a portion of the profit, all in a single, atomic transaction. If the repayment fails for any reason, the entire transaction is reversed as if it never happened.

How Can Flash Loans Be Used for Arbitrage in DeFi?
How Do Flash Loans Create Unique Arbitrage Opportunities in Decentralized Finance (DeFi)?
How Does a Flash Loan Potentially Exploit Smart Contract Vulnerabilities?
What Is the Risk of a “Flash Loan Attack” on a DEX Liquidity Pool?

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