# Flash loans: borrowing that must settle inside one transaction

A pure flash loan transfers assets to a contract on the condition that principal and the applicable fee return before the same transaction finishes. If the condition fails, the transaction reverts. Some Aave V3 flash-loan modes can instead open authorized debt, which introduces collateral or credit-delegation requirements.

Evidence: [Aave V3 flash loans](https://aave.com/docs/aave-v3/guides/flash-loans)

Canonical: https://degreesofsatoshi.com/encyclopedia/flash-loans/
Published: 2026-10-02
Substantively modified: 2026-10-02
Independently verified by an automated reviewer: 2026-10-02T15:08:18.373Z

AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied.

## Key facts

- **Duration:** Pure flash borrowing settles within a single transaction. ([Aave V3 flash loans](https://aave.com/docs/aave-v3/guides/flash-loans))
- **Failure:** Unmet repayment conditions revert the transaction. ([Aave V3 flash loans](https://aave.com/docs/aave-v3/guides/flash-loans))
- **Variants:** Aave V3 distinguishes flashLoanSimple from multi-asset flashLoan options. ([Aave V3 flash loans](https://aave.com/docs/aave-v3/guides/flash-loans))

## The lender resumes control after the callback

The borrowing contract requests an amount. The lender transfers it and invokes a receiver callback, where the borrowing contract performs its operations. The lender then checks repayment or the permitted alternative before allowing completion.

All of these calls are part of one transaction. The borrower cannot take the funds home and promise to return them in the next block. The transaction-level condition is what makes the pure form possible without an ordinary collateral deposit.

Evidence: [Aave V3 flash loans](https://aave.com/docs/aave-v3/guides/flash-loans)

## Follow a hypothetical repayment requirement

If 1,000 units are borrowed with a hypothetical 0.05% fee, the amount due is 1,000.5 units. Any operations inside the callback must leave the borrower able to satisfy that requirement. The rate is illustrative; deployed fee parameters must be read separately.

If a planned swap returns only 999 units and no other funds cover the gap, the required repayment cannot succeed. A revert undoes the transaction’s state changes, but an included failed attempt can still consume gas.

Evidence: [Aave V3 flash loans](https://aave.com/docs/aave-v3/guides/flash-loans); [EIP-140: REVERT instruction](https://eips.ethereum.org/EIPS/eip-140)

## A funding mechanism is not a vulnerability by itself

Flash liquidity can support refinancing or liquidation sequences. It can also amplify an exploit when another contract has faulty accounting or price assumptions. Calling an incident a flash-loan attack identifies capital used, not necessarily the defective rule.

Aave V3’s multi-asset flashLoan supports authorized debt-opening choices, while flashLoanSimple uses repayment for a single reserve. Explanations must distinguish these modes rather than generalize pure repayment to every function with flash in its name.

Evidence: [Aave V3 flash loans](https://aave.com/docs/aave-v3/guides/flash-loans); [Aave V3 Pool](https://aave.com/docs/aave-v3/smart-contracts/pool)

## Questions

### Can I keep a flash loan overnight without collateral?

Not under the pure flash-loan condition. It must be repaid in the transaction. A supported mode that opens lasting debt is a different outcome with its own authorization and collateral or delegation requirements.

Evidence: [Aave V3 flash loans](https://aave.com/docs/aave-v3/guides/flash-loans)

## Claims and scope

### flash-loans-quick-answer

A pure flash loan transfers assets to a contract on the condition that principal and the applicable fee return before the same transaction finishes. If the condition fails, the transaction reverts. Some Aave V3 flash-loan modes can instead open authorized debt, which introduces collateral or credit-delegation requirements.

Scope: {"collection":"defi","dataAsOf":null,"blockHeight":null}

### flash-loans-fact-duration

Duration: Pure flash borrowing settles within a single transaction.

Scope: {"collection":"defi","dataAsOf":null,"blockHeight":null}

### flash-loans-fact-failure

Failure: Unmet repayment conditions revert the transaction.

Scope: {"collection":"defi","dataAsOf":null,"blockHeight":null}

### flash-loans-fact-variants

Variants: Aave V3 distinguishes flashLoanSimple from multi-asset flashLoan options.

Scope: {"collection":"defi","dataAsOf":null,"blockHeight":null}

## Sources

- [Aave V3 flash loans](https://aave.com/docs/aave-v3/guides/flash-loans) — Aave. Atomic repayment, receiver callbacks and distinct debt-opening options. Locator: Overview; Execution Flow; Flash loan fee. Retrieved: 2026-10-02.
- [Aave V3 Pool](https://aave.com/docs/aave-v3/smart-contracts/pool) — Aave. Pool operations, collateral restrictions and liquidation settlement. Locator: supply; withdraw; borrow; repay; liquidationCall. Retrieved: 2026-10-02.
- [EIP-140: REVERT instruction](https://eips.ethereum.org/EIPS/eip-140) — Ethereum Improvement Proposals. Reverting rolls back state but does not refund work already executed; unused gas is not all consumed. Locator: Specification; Test Cases. Retrieved: 2026-10-02.

## Revision history

- 2026-10-02: First publication after primary-source research and independent automated verification.
- 2026-10-02: Before first publication, independent review checked and revised: sections, sources. Read Aave V3 Execution Flow, fee and multi-asset flashLoan versus flashLoanSimple debt modes. Pure repayment and authorized lasting debt are kept separate. Recomputed hypothetical0.05% of1,000 =0.5 fee, due1,000.5; it is not presented as a current deployed parameter. Added EIP-140 source for revert/gas behavior.

## Cite this entry

Degrees of Satoshi editorial project. “Flash loans: borrowing that must settle inside one transaction.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/flash-loans/