Flash Loans

Beraborrow offers Flash Loans on all the assets it controls!

What is a Flash loan?

It is an uncollateralised/unsecured loan that is deposited and repaid within the same block. Meaning a user can theoretically borrow ♾️amount (or as much of that asset is available) as long as the loan + fees is repaid within the same block.

How does Beraborrow use flashloans?

Instead of looping multiple times to increase exposure, users can do the following:

Let's imagine Alice has $100 worth of collateral and wants 5x the exposure to it.

Alice can flashloan $500 of collateral and deposit that as collateral into Beraborrow to mint $400 worth of $NECT, then take the $NECT minted and sell if for the collateral, now Alice has $500 ($400 + initial $100) of collateral, enough to repay the flashloan. In doing this Alice now has $500 worth of exposure to the collateral in Beraborrow and owes $400 worth of $NECT.

If the value of the asset increases by 25% now that collateral is worth $625, but Alice still needs to repay $400 of $NECT to Beraborrow to redeem her $625.

What Alice can do is flash the $400 of $NECT redeem her $625 worth of collateral, sell $400 worth to buy $NECT and then she is left with $225 of collateral - fees. A 125% profit from a 25% increase.

By using flashloans Alice could complete this process in 2 steps rather than having to loop 6+ times.

Nectar

Nectar ($NECT) can be flash-minted for more than hextillions of value. You repay the entire amount plus0.0001% of the volume flash-minted.

With this mechanic, $NECT aspires to be the most efficient arbitraging asset in Beraborrow's ecosystem.

Collateral Assets

It will depend on the type of collateral assets, since examples like $siBGT (staked $iBGT) will probably stay intransferable, but except for this rare edge case all collateral types will be flashloanable.

The current fee for collateral assets is 0.001%over volume.

Dev Integration

You will find the flash-mint endpoint for Nectar in its token address, and for the specific collateral type it will be in itsDenManager contract.

The endpoints follows the IERC3156 standard:

function flashLoan(
    IERC3156FlashBorrower receiver,
    address token,
    uint256 amount,
    bytes calldata data
) external returns (bool) {
  ...
  require(
      receiver.onFlashLoan(msg.sender, token, amount, fee, data) == keccak256("ERC3156FlashBorrower.onFlashLoan"),
      "IERC3156: Callback failed"
  );
  ...
  /// @dev Remember to repay the amount + fee
}