> - Flash-loan strategies (this verges on illicit, ymmv)
Why illicit?
Tell me more about flash lending, I've seen interesting things being done with uniswap and I find defi fascinating!!
Why illicit?
Tell me more about flash lending, I've seen interesting things being done with uniswap and I find defi fascinating!!
The reason I say it verges on illicit, is that the most profitable flash-loan trades I've read about usually depend on some form of market manipulation and special knowledge about price oracles. They're not illicit in their own right, and can be a great tool for arbitrageurs I imagine.
https://www.coindesk.com/defi-exploits-flash-loans-industry-...
I still don't get it. Can you point me to some actual examples?
Do you mean people are front running contract using data provided by oracles? I would not see that as illegal, just as removing friction coming from oracles that have too much latency.
If I know how an oracle calculates a price for a pair, I can probably alter the oracle's value for it (with a lot of volume from your flash loan), without affecting other exchanges value for it. This lets you create arb opportunities for yourself: https://www.trustnodes.com/2020/02/15/hacker-makes-360000-et...
Here's an explanation I just googled for that includes oracle manipulation: https://hackingdistributed.com/2020/03/11/flash-loans/
Again, there are certainly legit applications of flash loans, the market is still learning. This looks like a legit triangle arb: https://medium.com/@kentmakishima/the-43k-defi-magic-trick-f...
I think these exploiters giving some of the money back to their victims testifies to the shadiness of their tactics: https://www.longhash.com/en/news/3407/Why-Do-DeFi's-%22Flash...
Front running is a whole other beast :)