there's a secret world that you probably aren't aware of traders borrowing millions to invest with no collateral but there's a catch if they can't return the money within NUMBER_TOKEN seconds they could lose everything so who are these traders well they call themselves the flash boys and they aren't making your average order book trade this is lending on steroids and it could jeopardize the entire crypto ecosystem so welcome to the dangerous dog eat dog world of flash trading speaking of only NUMBER_TOKEN seconds to take advantage you can take advantage of signing up for my patreon linked in the description that you'll have access to my full portfolio and buy alerts that have landed me up more than NUMBER_TOKEN percent the year is NUMBER_TOKEN and marble a now defunct smart contract bank introduces us to something radically new flash loans a type of loan that could never exist in our traditional lending system so foreign to what we're used to in traditional finance that even today there isn't a good analogy for it the term comes from this book by michael lewis flash boys is about the wild world of high frequency trading in the us with flash loans for the very first time you could borrow as much as you wanted to with zero collateral as long as the funds were returned within the same transaction suddenly people were borrowing millions yes millions of dollars owning guess how much nothing this meant anyone could be a crypto whale however the idea didn't get much traction at first because the market was turning bearish at the time and hype was starting to slow down in the crypto markets and the world started forgetting about flash loans altogether and that is until ave jumped in the scene in NUMBER_TOKEN so you might be asking yourself why would anyone borrow millions of dollars within one transaction if you give it back within NUMBER_TOKEN seconds and the answer is profit to help us understand how much can be made with flash loans i chatted with software engineer andreas i mainly used them for arbitrage trading there was no use case flash for flash loans back then because people didn't know what to do with those flash loans if we want to see a more clear example that one we know that a flash loan happened here uh for sure so that that one guy made NUMBER_TOKEN NUMBER_TOKEN in NUMBER_TOKEN seconds yeah that one guy yeah there are three main reasons you might choose to take out a flashlight the most popular is to take advantage of an arbitrage opportunity so picture this your mom trades apples for two dollars and your dad trades apples for three dollars they're they're competitors if this remains constant you just discovered an infinite money glitch by buying from your mom and selling to your dad yes this is gonna mess up your inheritance but you can make money in the short run this is known as an arbitrage opportunity eventually your dad says hey i have way too many apples so he lowers the price hoping to get rid of that extra supply this means the opportunity has essentially closed and the range between the three and two dollar apples narrows with each transaction this is what makes markets efficient there's actually an interesting book on this called a random walk down wall street that explores these concepts even further here's how arbitrage could work in crypto if solana is NUMBER_TOKEN on kucoin but it's only NUMBER_TOKEN on coinbase depending on fees you could profit off of this price discrepancy flash loans allow you to do this without ever actually buying solana so basically this person found that there was big price discrepancy between uniswap and sushi swap yeah among
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