@Samuel94 I must commend your outstanding work in this article.
Regarding your primary research question;
Uncollateralized loans with no borrowing limits in which a user borrows and returns cash in the same transaction are known as flash loans. A smart contract will halt the transaction and return the money to the lender if the user is unable to repay the loan before the transaction is completed.
Because flash loans are unsecured and uncollateralized, anyone can obtain them and borrow funds.
To apply for a Flash Loan, you must first create a contract requesting one. The contract must then follow the instructions and repay the loan plus interest and fees in the same transaction.
The Flash Loan makes use of atomicity to allow users to borrow money without having to provide collateral. There are two significant limitations to mention.
To begin, whenever you use a Flash Loan to borrow an asset, you must pay a fee of 0.09% of the loaned amount.
Users with limited capital can borrow large sums on a variety of marketplaces thanks to flash loans. The loan is approved right away, but you must do something with the money you borrow in order to repay it.
Some risks of having Flash loans are,
- While the possibility of defaulting on a flash loan is almost negligible due to its inherent mechanics, exploiters can still carry out flash loan attacks. Since the transaction will be void if the borrower does not return the funds within the same block, lenders are safe from the risk of losing their deposits
- Unlike while comparing with other loans Flash Loan has no limit for borrowers and it can be taken out instantly as long it is paid back in same transaction.
I hope you find this comment helpful