0xAbhay / Flash-loans

Borrow millions without collateral from Aave using Flash Loans

FlashLoanExample

FlashLoanExample is a Solidity smart contract that demonstrates how to use flash loans with the Aave protocol. Flash loans are a powerful feature of Aave that allow users to borrow assets without providing any collateral, as long as the borrowed amount is returned within the same transaction. This contract is designed to be used with the Aave protocol's V3 version.

Table of Contents

• Introduction
• Flash Loans
• Dependencies
• Usage
• How It Works

Introduction

This contract serves as an example of how to receive and use flash loans in your own smart contract. It utilizes the Aave protocol's V3 flash loan functionality, which allows users to borrow any supported asset without collateral, as long as the borrowed amount is returned along with an additional premium within the same transaction.

Flash Loans

Flash loans are a unique feature offered by the Aave protocol, where users can borrow assets without any collateral, given they return the borrowed amount plus a fee in the same transaction. This enables developers to perform complex operations, such as arbitrage or liquidation, using borrowed funds within a single atomic transaction.

Dependencies

This project relies on the following external libraries and contracts:

• @aave/core-v3/contracts/flashloan/base/FlashLoanSimpleReceiverBase.sol: This contract is a base contract from Aave, which provides the necessary functions for receiving and repaying flash loans.

• @openzeppelin/contracts/token/ERC20/IERC20.sol: This interface defines the standard functions for interacting with ERC-20 tokens.

Usage

To use this contract, follow these steps:

1. Deploy the FlashLoanExample contract, providing the IPoolAddressesProvider as a constructor parameter.

2. To initiate a flash loan, call the createFlashLoan function with the desired asset address and the amount you wish to borrow.

3. The contract will receive the flash loan, and the executeOperation function will be automatically triggered. This is where you can perform your desired actions, such as arbitrage or liquidation, using the borrowed funds.

4. Within the executeOperation function, you can interact with the asset using the IERC20 interface.

5. Finally, make sure to repay the flash loan by transferring the borrowed amount along with the premium back to the Aave protocol. The contract will take care of this repayment if the executeOperation function returns true.

How It Works

1. The contract is deployed, and the IPoolAddressesProvider is provided as a constructor parameter.

2. The createFlashLoan function is called, specifying the asset address and the amount to be borrowed.

3. The contract receives the flash loan, and the executeOperation function is invoked automatically by the Aave protocol.

4. Inside the executeOperation function, you can perform your desired operations using the borrowed asset.

5. Once your operations are completed, the contract approves the Aave protocol to withdraw the total amount owed (borrowed amount + premium) from the contract.

6. The flash loan is repaid to the Aave protocol, and the transaction is completed.

Happy coding and have fun exploring the possibilities of flash loans with the Aave protocol!