Flash Loans on Anchor

This is a point I can relate with, someone flash loans borrows a few bills and breaks something. pretty large systemic risk and probably the main reason why people would not be on board with them. worse is like what happened to CREAM, that would 100% kill Anchor on the spot.

It’s definitely something that even though we can do it the systemic risk factors need to be throughly worked out. With that said the potential revenue they offer looks to be uncertain, and there are other protocols that can do it first for longer before Anchor takes it’s jab at it.

I like your analogy with mars protocol, they have them but they’re deployed with specified use cases intended. This is the same with white whale. It goes to show just having flash loans open for general use cases is not always the best of ideas. If we focused them for liquidation insurance only it can make it more of a borrowing feature and leaves the door open to future general use much further down the line when we have more evidence of their use in markets, while reducing the risks of malicious attacks.

I think eventually all money markets will come to offering similar features especially on the borrowing side since that is where income stems from. Look at what happened with concentrated liquidity pools, first curve than about every dex and their mothers.


We should be wary here. As @paletas mentions here there are some risks.

It’s a great idea to prevent recursive attacks against Anchor. However, the biggest one I see here is the ability for a flashloan to borrow a shit load of UST and use it to attack the UST peg and put things into a death spiral or snag the BTC reserve that is coming into place.

Right now, the inability to do a flashloan of UST on Ethereum is actually a blessing in disguise. There isn’t enough liquidity for UST on Ethereum. If there was you could borrow there, execute multiple transactions on faster chains and then revert.

With great power comes great responsibility. Flashloans really only used for arbs and exploits. Not real world usage (currently).

I think it should stay out of Anchor personally. Could potentially be combined with an aUST xaUST proposal and then another protocol can leverage the more programmable xaUST to do shit like this.


This is interesting - and an appropriate time to be having this conversation.

Seems like flashloans could contribute additional use cases and revenue to Anchor. When I think of flashloans, I think of apps such as Furocombo which allows users to pair multiple transactions.

It bridges the more technical side and allows folks to visualize the routing - leading to more sophisticated series of transaction and a willingness to use them.

Is there something similar for Terra? I wonder if it would be worth giving them a grant and investing in a tool which could spur adoption and have Anchor as a prominent choice

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being against flashloans because they may expose some risk doesn’t make sense since flash loans already exists in terra, so whatever risk you think might come with flash loans are already here. what flash loans don’t do is bring risk to the lender because its fairly easy to make sure you were repaid you entire amount atomically in the same tx, and anchor right now is just giving away market share to white whale

Don’t think there is something similar on terra yet. But I know a project that is looking to launch on terra that might have this in mind! I think I finally convinced them to build on Terra.


I think Mars Protocol is trying to build something like this, since they have whole contract to contract part

White whale has also just passed a proposal to open up flash loans from their vaults

See https://app.whitewhale.money/gov/poll/4

Flash loans would address multiple community suggestions with 1 shot:




I think there is very strong community incentives to work on this.

I don’t think its a good idea to enable flash loan in Anchor it’s just enabling more attack surfaces to exploit terra ecosystem. Currently the main use-case of flash loan in Ethereum is to exploit a protocol.