What is Flash Loan (Aave)?

A Flash Loan is a type of decentralized finance (DeFi) loan that is rapidly executed — borrowed and paid back in quick succession — without the need for collateral. An experimental technology offered by the Aave platform, Flash Loans are made possible because of how data is recorded on the Ethereum blockchain. If the principal and interest are not repaid within one Ethereum transaction, the Flash Loan is effectively reversed.