We will take a look at the most interesting section of our platform, which is FSC (Flash Swap Combo), the best way to take full advantage of arbitrage in decentralized exchanges with no balance in the wallet. Flash loans can be used to execute the transaction when an arbitrage opportunity is obtained.
What is a Flash loan?
Flash loans are introduced by the Aave, which is an open-source lending protocol for anyone to deposit and borrow crypto assets. Flash loans allow users to borrow large amounts up to the total liquidity available with zero collateral. A Flash loan is a rapid transaction that can be executed when borrow and repayment criteria are satisfied in a single transaction. If the repayment is not done, the whole transaction will be reverted. Anyone can be a crypto whale with a flash loan without any capital.
- Arbitrage trades
- Collateral swap
- (Debt) Interest rate swap
- (Debt) Currency swap
The most popular use case by far is Arbitrage trades. For those unfamiliar, arbitrage is the strategy of making a profit from price differences between different markets. To make a significant amount of profit, you will need substantial capital to get started, and this is where the magic happens — We use flash loans to generate free money with no upfront balance.
For arbitrage traders, Premium Block lowers the barriers-to-entry for building money legos, providing all the necessary elements to create arbitrage strategies including the so far coder-only flashloans. But, please keep in mind that Premium Block does NOT find arbitrage opportunities for you. You will have to find it yourself.
1) Find an arbitrage opportunity >0.09% to cover the flash loan's fee
2) Have some ETH/BSC in your wallet enough to pay for gas fee
Check the token price for the right opportunities. Token prices are always not the same across all DEXs. When you see the price difference above 0.09% which is the flash loan’s fee, you can set the flash loan amount and create a swap combo by connecting 2 or more DEXs and execute the transaction.
When the transaction gets executed, the final profit will be credited to your wallet address. This way, a successful arbitrage can be done without any capital.
Step by step process
- Open Premium Block App.
- Click on the FSC section.
- Click on add block and click on Flashloan with the available platform and borrow 10,000 BNB.
4. Click on add block and choose Sushiswap.
5. Select BNB and enter 10,000.
6. Choose PRB to swap. Price and quantity will be automatically updated.
7. Choose Pancakeswap by adding a block.
8. Select PRB and enter 640,000.
9. Select DAI to swap, price and quantity will be automatically updated.
10. Choose 1inch by adding another block.
11. Choose DAI and enter 3,232,000.
12. Choose BNB to swap, price and quantity will be updated automatically.
13. Check the final output of the BNB amount that will be received after the Flashloan fee of 0.09% and the platform fee if any.
14. Execute the transaction.
15. After a successful transaction, check the wallet balance.
Successful arbitrage of 91 BNB has been earned without any collateral. Likewise, multiple combo blocks can be created and executed. New DeFi projects can also be checked for any vulnerable coding error that can trigger the minting of multiple tokens and ending in flash loan attacks. This can save millions of dollars for any project with a high market cap.
Reference article can be checked in Furucombo Medium article. Credits to team Furucombo.
Stay tuned for more updates. Stay Safe!