Is it possible to profit off of flashloans?
Is it possible to profit off of flashloans?
I know it may sound stupid for anybody that has watched those videos on YouTube where they’re “teaching” you how to do it but never get the actual profit.
Yes, Im drawn to the topic because with the illusion of “easy money”, but I actually think that it might work for some reason. Also, almost everything people are attracted to in the market is because it looks like easy money in the begging. After some time they realize it’s not so easy, but doable. This is what Im trying to reach here.
Id love to hear from anybody with an experience on the subject.
Yes, it can be a good tool helping you execute a profitable strategy. However, taking a flashloan is not in itself a profitable strategy, it is only a tool you can use in your strategy where the profit comes from some other opportunity.
MEV bots do for example use flashloans in various ways to make profits from things like DEX arbitrage, front running (e.g. sandwich attacks), liquidations (on lending markets like Aave) and other forms of MEV where the instant liquidity from flashloans is very useful.
Many of these bots also structure the transactions to revert if it is not profitable, removing the risk of losing money if the state changes (other than gas cost).
Flashloans have also been known to be used by malicious actors to execute very profitable exploits.
Possible yes. But you need a liquidation market, ie you use a flashloan to buy out someone who got liquidated and you get a 5-10% discount for being the liquidator. I know someone who wrote a bot to do this, grabbing flash loans and buying out other folks loans. He made 600k in a year and then the market was full of bots trying to compete. Makes no money now, good luck!