https://embed.notionlytics.com/wt/ZXlKd1lXZGxTV1FpT2lJM01XRTRZemhsTmpabU0yWTBOV0ZoWVdVNVpEVTVOV1F5WTJFd1ltTXpNaUlzSW5kdmNtdHpjR0ZqWlZSeVlXTnJaWEpKWkNJNklrUm1aa015YmpsbFYyZDRNMGMwVGtoNVZsQjFJbjA9
V2 architecture gives access to combined liquidity from all Balancer Pools
Borrow several different tokens in one transaction
Pay zero fees
<aside> 💡 Imagine you had $1000 in ETH deposited into Compound with $200 USDC borrowed. To withdraw all your ETH, you need USDC. With flash loans, you can borrow $200 USDC, repay your debt, withdraw the ETH from Compound, deposit ETH into Aave, borrow $200 USDC against that ETH and repay your loan. All in one transaction. Sounds crazy, right?
</aside>
Flash loans are uncollateralized loans that must be repaid (including interest) in a single transaction.
The novelty Balancer brings to Flash Loans is it’s Vault architecture, consolidating liquidity across all Balancer Pools. The Vault is a smart contract that holds and manages tokens across all Balancer Pools thus separating token accounting and management from Pool logic. Since all tokens are under the Vault, consolidated balances are available for Flash Loans. As a result, users have access to deeper, combined liquidity across all pools, enabling larger loans. Flash Loans are atomic transactions, if a given strategy is not executable, the transaction is reverted.
In addition to having access to deeper liquidity across all Balancer pools, users also get free Flash Loans. Yes, that is correct! In contrast to other protocols that charge a fee for performing flash loans, Balancer offers zero fee flash loans. The fees collected as interest on flash loans go to the DAO Treasury. However, at deployment flash loans fees were set to zero, and at the time of writing they have still not been activated by the governance.
https://etherscan.io/tx/0xe7c656a50db6f13b6b97cf1f864592da40871cf1f9932877b6d08f16866ecbca
https://etherscan.io/tx/0xe7c656a50db6f13b6b97cf1f864592da40871cf1f9932877b6d08f16866ecbca