Flash Loan Arbitrage Bots in DeFi: Mechanism, Risks, and Opportunities Explained
Flash loan arbitrage is a process where a person borrows a large amount of cryptocurrency without providing any collateral, uses those funds to buy and sell assets on different exchanges to profit from price differences, and repays the loan in a single blockchain transaction. If the borrower cannot pay back the loan plus interest within the same block, the entire trade cancels, ensuring the...