# ↪ flash-loans ## Flash Loans Flash Loans are unique transactions that allow users to borrow assets without upfront collateral, provided that the borrowed amount plus a fee is returned within the same transaction (also known as "one-block borrows"). Since there is no real-world equivalent, understanding how blockchain state transitions occur within blocks is essential. ***Note:** Flash Loans are an advanced feature intended for developers. A solid grasp of the Ethereum Virtual Machine (EVM), programming, and smart contract development is necessary to utilize this functionality.* *** ### Overview Flash Loans enable users to access the pool's liquidity for a single transaction, on the condition that the borrowed amount plus a fee is returned or a debt position is opened (if permitted) by the end of the transaction. This feature is applicable only to reserves where borrowing is enabled. HyperLend offers two methods for flash loans: 1. **`flashLoan()`**\ Allows borrowers to access liquidity from multiple reserves within a single flash loan transaction. Borrowers also have the option to open a variable-rate borrowing position backed by supplied collateral or via credit delegation. *Note:* The flash loan fee is waived for approved flash borrowers managed by the `ACLManager`. 2. **`flashLoanSimple()`**\ Enables borrowers to access liquidity from a single reserve in a transaction. In this case, the flash loan fee is not waived, and borrowers cannot open any debt positions at the end of the transaction. This method is more gas-efficient for those seeking a straightforward flash loan with a single asset. *** ### Execution Flow For developers, here's a conceptual framework to assist in building your solution: 1. **Initiate the Flash Loan**\ Your contract calls the `Pool` contract, requesting a flash loan of specific amounts of reserves using either `flashLoanSimple()` or `flashLoan()`. 2. **Funds Transfer and Callback**\ After performing necessary checks, the `Pool` transfers the requested amounts to your contract and then calls `executeOperation()` on your contract. 3. **Execute Custom Logic**\ With the flash-loaned funds now in your contract, you can perform any arbitrary operations within your code. 4. **Repayment or Debt Opening** * **For `flashLoanSimple()`:** After your operations, you must approve the `Pool` to pull the flash-loaned amount plus the fee. * **For `flashLoan()`:** Depending on the `interestRateMode` for each asset, you must either approve the `Pool` for the amount plus fee or ensure sufficient collateral or credit delegation is available to open a debt position. 5. **Transaction Completion**\ If the owed amount is not available due to insufficient balance, lack of approval, or inadequate collateral for debt, the transaction will revert. **All these steps occur within a single transaction, meaning they happen within one Ethereum block.** *** ### Applications of Flash Loans Flash Loans have various practical applications, including: * **Arbitrage Opportunities**\ Execute arbitrage between assets without needing the principal amount upfront. * **Liquidation of Positions**\ Liquidate borrowing positions without repaying the debt upfront by using the discounted collateral obtained to repay the flash loan amount plus the fee. *** ### Flash Loan Fee The flash loan fee is initially set to **0.04%** at deployment and can be adjusted via a governance vote. Use `FLASHLOAN_PREMIUM_TOTAL` to retrieve the current value. The fee is shared between liquidity providers (LPs) and the protocol treasury: * **Fee to LPs:**\ `FLASHLOAN_PREMIUM_TOTAL` minus `FLASHLOAN_PREMIUM_TO_PROTOCOL` * **Fee to Protocol Treasury:**\ `FLASHLOAN_PREMIUM_TO_PROTOCOL` *Initially, `FLASHLOAN_PREMIUM_TO_PROTOCOL` is set to 0.* *** ### Step-by-Step Guide #### 1. Setting Up * **Implement the Receiver Interface**\ Your contract that will receive the flash-loaned funds must implement the `IFlashLoanSimpleReceiver` or `IFlashLoanReceiver` interface by defining the appropriate `executeOperation()` function. * **Grant Allowance**\ Since the owed amounts will be pulled from your contract, you must grant the `Pool` contract an allowance to transfer the funds needed to repay the flash loan amount plus premiums. #### 2. Invoking `flashLoan()` or `flashLoanSimple()` There are three ways to call the flash loan methods: * **From an Externally Owned Account (EOA):**\ Send a transaction to the `Pool` contract calling `flashLoan()` or `flashLoanSimple()`. Refer to the `Pool`documentation for parameter details, ensuring you use your contract address from step 1 as the `receiverAddress`. * **From a Different Contract:**\ Similar to the EOA method but initiated from another contract. Ensure the `receiverAddress` is your contract address from step 1. * **From the Same Contract:**\ If you're using the same contract as in step 1, use `address(this)` for the `receiverAddress` parameter. **Security Tip:** Never store funds permanently on your flash loan receiver contract, as they could be vulnerable to 'griefing' attacks where an attacker exploits the stored funds. #### Completing the Flash Loan * **Repayment:**\ After executing your custom logic in `executeOperation()`, you need to repay the flash-loaned amounts if you used `flashLoanSimple()` or set `interestRateModes = 0` in `flashLoan()`. * **Calculating the Amount Owed:**\ Ensure your contract holds the required amount plus the premium. This can be calculated by summing the relevant entries in the `amounts` and `premiums` arrays provided in `executeOperation()`. * **Automatic Pull of Funds:**\ You don't need to manually transfer the owed amount back to the `Pool`; the funds will be automatically pulled at the end of your operation. #### Incurring a Debt (Deferred Repayment) If you used `mode=1` or `mode=2` for any assets in the `modes` parameter, the `onBehalfOf` address will incur the debt, provided that it has authorized the `msg.sender` to incur debts on its behalf. This allows for a mix of assets—some can be repaid immediately, while others result in an open debt position. *** --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. 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