Introduction

Welcome to Aave! Aave is a decentralized non-custodial money market protocol built on Ethereum that enables users to lend and borrow digital assets. It leverages smart contracts to allow users to deposit and borrow funds, generate interest, and exchange assets. It also has a built-in risk management system, which allows users to borrow or lend with confidence. Aave also offers users flash loans, which are short-term loans that can be taken out and repaid in a single transaction, allowing users to take advantage of arbitrage opportunities or hedge against price movements. The protocol is governed by Aave Governance, a decentralized autonomous organization which allows Aave users to vote on changes to the protocol and its features. Aave also has its own native token, called Aave, which is used to incentivize users and to govern the protocol.

How do the flashloans work?

Flashloans on Aave are an innovative type of loan that allow users to borrow funds instantly without having to post collateral. These loans are made possible through Aave’s flashloan smart contract, which allows users to borrow funds within a single Ethereum transaction. Flashloan users can access funds within seconds, allowing them to take advantage of arbitrage opportunities in the DeFi space.

To use a flashloan, users must first deposit funds into Aave. The user then sends an Ethereum transaction to the Aave smart contract, including the amount they want to borrow and the address of the recipient. Aave then sends the requested funds to the recipient’s address, minus a fee. The user then has to repay the loan within a certain time frame or risk being penalized.

Flashloans are a great tool for traders and investors who want to capitalize on short-term opportunities. With flashloans, users can access funds quickly and cheaply, allowing them to take advantage of arbitrage opportunities and maximize their profits. They also provide an opportunity to access funds without having to post collateral, making them a viable option for those who don’t have access to traditional lending options.

Methodology

This dashboard will take a look at how users interact with flashloans- particularly from a stable vs. volatile standpoint. This various tabs will delve into specifics within the flashloans tables- loan amounts (summary stats), specifics on the loans themselves, user behavoir, and finally the specific stables vs. specific volatile tokens used. Enjoy!