Key Takeaways:
● Flash Loan is the sharpest double-edged sword in the DeFi world.
● To suppress its ugly side, the public has to obtain a clear view of its transactions and connections with other DeFi businesses, which was harder to achieve because of the data gaps between protocols.
● EigenPhi’s Flash Loan module bridges the data gaps and reveals the behaviors of Flash Loan stakeholders.
April 30, 2022, Saddle Finance, $11M.
April 30, 2022, Fei Rari, $80M.
April 28, 2022, Deus Finance, $13.4M.
April 17, 2022, Beanstalk, $182M, the largest yet of its type.
April 13, 2022, ELEPHANT MONEY, $22.2M.
Causing a total loss of $308.6M in April alone, all of these attacks on DeFi protocols have the same MO.
According to Wall Street Journal, the attack on Beanstalk had a unique advantage.
A $1 billion loan was taken out with no collateral, no proof of income, and no identity verification. The loan had to be repaid in less than a second, but that was all that was needed to steal tens of millions of dollars.
Yep, it’s Flash Loan–a cheap, instant, and anonymous form of financing based on cryptocurrencies–that induces such humongous damages.
The biggest capital source for Flash Loan, AAVE suggested its purpose is to build “a more resilient ecosystem with liquidations”:
By removing the need to hold any capital, we aim to democratize the liquidation market and enable faster and easier liquidations. The safety of the whole ecosystem will be better and the risk of “bad debts” much lower.
Upon seeing the ugly of Flash Loan and being told the good heart behind it, how can we find out what a badass it is to prevent the later malicious intentions? We need to cross data gaps between different protocols to achieve this goal. These gaps have hindered DeFi users from recognizing risks and obstructing the market from generating and broadcasting effective signals.
Welcome to the Flash Loan module released by EigenPhi, which is built on a coherent and unified data model to help you bridge the data gaps by integrating multi-dimensional information.
Let’s dive in.
Unveil The Big Picture
First, you can read the trends in the chosen timeframe, 1 day, 7 days, or 30 days. We will use 7 days as the context for the stuff below.
The Summary section tells you that 244 Flash Loans have occurred during the last 7 days. We also show how many transactions embed these Flash Loans. Sometimes, a transaction can have more than one Flash Loan.
The total amount of the 244 Flash Loans and the fees required to implement these loans can be found here too, which involves 29 borrowers and 10 assets.
The following chart illustrates the trend of the last 7 days, indicating the daily loan amount split by Aave v2 and dYdX. The bar on Jun 1 tells us that 65 Flash Loans happened that day, over $12M on Aave V2 and almost $2.876M on dYdX. And the lowest data point happened on Jun 4.
You can switch the time window to 30 days to get the bigger picture.
May 12, the day UST depegged and LUNA crashed, is the day with the highest Flash Loan amounts and frequency.
Uncover The Hidden Behaviors with Interactive Exploratory Analysis
Let’s switch back to 7 days and check the top Flash Loans.
Some essential information regarding the transaction is shown here, including time, purpose, amount, fee, transaction address, borrower address, loaned asset, and protocol used for the loan.
The most important field here is, of course, Purpose. According to the founder of AAVE, you can leverage Flash Loan in use cases like:
● Collateral swaps
● Interest rate and currency swaps
● Self Liquidation
● Leverage aggregator
Usually, the purpose we listed can be attributed to these cases, and we connect the data here with Arbitrage Scan to draw a more in-depth image.
Take this Flash Loan, for example.
Its purpose is spatial arbitrage. Click the row, and you will be directed to the arbitrage transaction detail page, which reveals that the same contract ends with 7475 used the loaned $USDC to buy $DAI from UNISWAP, swapped them with $USDC on CURVE-FI, and earned almost $10K eventually as profit.
In essence, our Flash Loan module integrates the fragmented data and uncovers the cloaked behaviors.
We also broadcast such behaviors to the public like this tweet alert.
Following the Top Flash Loan section is the Latest Flash Loan part. This is the real-time Flash Loan happening on Ethereum now. And you can navigate to the pages you are interested in to find out more.
Several DeFi protocols are supporting Flash Loan on the market. EigenPhi covers the two mainly used ones for now. We show you the amount, fees, Flash Loan count, transactions count, the protocol’s borrowers, and the assets it provides.
These features regarding Flash Loan are just the beginning. In the incoming days, you will be able to examine a protocol’s details, such as the top 10 assets, top destinations, etc., with the same level of data and information interaction and connectivity, all of which can benefit your wise investment decisions.
Stay tuned!
Follow us via these to dig more hidden wisdom of DeFi: