What is Flash Loan?
A flash loan is a DeFi loan that must be borrowed and repaid within a single atomic transaction. Because the transaction reverts if it isn't repaid, no collateral is required. Flash loans enable powerful arbitrage and unfortunately many DeFi exploits.
Why Flash Loan matters
Understanding Flash Loan is part of building a solid mental model of how Bitcoin, blockchain and Web3 systems actually work. Concepts in the Ethereum category sit at the foundation of the broader stack — get them right and the rest is far easier.
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Related terms
- DeFi (Decentralized Finance) — Financial services built from smart contracts.
- Smart Contract — Code on a blockchain that automatically enforces its rules.
- AMM (Automated Market Maker) — A pricing formula that replaces order books.
More ethereum terms
- Ethereum — A programmable blockchain that supports smart contracts.
- EVM (Ethereum Virtual Machine) — The execution environment for Ethereum smart contracts.
- Gas — The unit measuring computational cost on Ethereum.
- NFT (Non-Fungible Token) — A unique, non-interchangeable token on a blockchain.
- Solidity — The most popular programming language for Ethereum smart contracts.
- Web3 — An umbrella term for blockchain-based, user-owned internet applications.
- DAO (Decentralized Autonomous Organization) — An on-chain organization governed by token holders.
- dApp (Decentralized Application) — An app whose backend lives on a blockchain.
Keep exploring
Continue with the full blockchain glossary — 136 terms in total — or read the developer blog and FAQ for deeper context.