Flash Swap

A flash swap is a decentralized finance feature that allows a user to borrow assets from a liquidity pool without collateral, provided that the loan is repaid within the same transaction block. This is often used for arbitrage, where the trader uses the borrowed funds to profit from a price difference on another exchange and then repays the pool plus a fee.

If the trade is not profitable, the entire transaction reverts, protecting the user from loss. Flash swaps are a powerful tool that enables complex financial operations without the need for upfront capital.

They demonstrate the unique capabilities of programmable money.