Introducing Flash Loans 2.0

Russo Barriga
May 29 · 3 min read

HodlTree presents the second-generation of flash loans enabling a better environment for both arbitrageurs and liquidity providers.

What are Flash loans?

What makes HodlTree Flash Loans the second generation

This condition creates a win-win situation for all participants, as it expands the range of possibilities for arbitrage and gives liquidity providers the opportunity to earn a higher percentage of their capital compared to the current protocols.

The first module for Flash Loans 2.0 focused on working with Stablecoins has been launched on Mainnet and currently supports USDC, DAI, sUSD, GUSD and TUSD. In the near future, the team also plans to expand Flash Loans 2.0 range for other tokens pegged to the same benchmarks, for example WBTC/renBTC.

How it works

Now let’s imagine that Bob saw an arbitrage opportunity and decided to take a flash loan. He borrowed $100,000 DAI and paid it back within the same transaction with $100,100 USDC, where $100 is the protocol fee that goes to the liquidity pool as a profit, which is distributed among the liquidity providers in proportion to their share in the pool and thus increases the value of the LPT token.

Let’s assume that after some time when Alice decided to withdraw her funds from the pool, the LPT token is already worth $1.2. In this case, when exchanging 995 LPT tokens, Alice will get $1194, thus recording a profit of $194 or 19.4% of her initial deposit.

Use cases

The other, less obvious one is the exchange of stablecoins with lower commissions. And while such popular DEXs as Uniswap or Sushiswap have a fee of 0.3%, HodlTree’s commission is three times lower.

Stay tuned


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