We all know how traditional loans work. You ask a financial institution to lend you some money; they ask you for collateral; you put up the collateral and agree to the terms; and they issue you the loan.
The crux of it is that the lender sleeps well at night knowing that even if you default on your loan and lose their money, they’ll get the collateral you put up. On top of that, the loan is repaid over time with a fixed or fluctuating rate, giving both sides what they need.
However, an innovative decentralized finance (DeFi) concept called flash loans has emerged over the last two years that challenges the idea of traditional lending and borrowing practices.
Flash loans are like lending on steroids. They require no collateral, are instantaneous, and entail minimal risk to both the lender and the borrower.
Sound impossible? It almost is, but thanks to relentless innovation in the DeFi space, flash loans are an exciting new…
