Lightning loan

in lightning •  4 years ago 

Content

Lightning lending may be Aave's most famous contribution to the DeFi field to date. This feature allows users to borrow large amounts of cryptocurrency without the need for collateral at all. As you can imagine, zero-collateral lending has quickly become one of Aave's main functions to quickly attract a large customer base.

Flash loans do not use collateral to guarantee repayment, but rely on the borrower's repayment time. The loan will only be approved if the loan is repaid in full within the same Ethereum block where the loan was issued. If the loan is not repaid in time, the entire transaction will fail.

With the continuous expansion of DeFi, people may have a lot of reasons to make such short-term loans, but the main use case of Flash Loans is to quickly seize arbitrage opportunities, refinance loans in other loan agreements, or exchange current deposits Collateral in other pools. Aave's unified fee for flash loans has brought it a stable source of income as the demand for services continues to grow

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!