Risk-Free Uncollateralized Lending in Decentralized Markets: An Introduction to Flash Loans

Jack Mandin

No 2025-06, Discussion Papers from Bank of Canada

Abstract: A flash loan is a special type of uncollateralized loan with zero default risk. I document the use for flash loans across major blockchains that are Ethereum-Virtual-Machine-compatible. Flash loans expand access to liquidity, and highly sophisticated actors use them for many practical applications.

Keywords: Digital currencies and fintech; Financial markets (search for similar items in EconPapers)
JEL-codes: G0 G1 G2 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2025-03
New Economics Papers: this item is included in nep-fmk and nep-pay
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.34989/sdp-2025-6 Abstract (text/html)
https://www.bankofcanada.ca/wp-content/uploads/2025/03/sdp2025-6.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bca:bocadp:25-06

Access Statistics for this paper

More papers in Discussion Papers from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().