> For the complete documentation index, see [llms.txt](https://docs.clovis.network/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.clovis.network/more/yei-finance/developers/flash-loans.md).

# Flash Loans

Flash loans are innovative financial instruments tailored for developers, allowing the borrowing of assets without collateral, provided the liquidity is returned within a single blockchain transaction.

## **How Flash Loans Work**

Flash loans necessitate a comprehensive understanding of the Ethereum Virtual Machine (EVM), programming, and smart contracts. They provide pool liquidity for a single transaction, requiring the entire borrowed amount plus an additional fee to be returned by the transaction's conclusion.

### **To initiate a Flash Loan, follow these steps:**

{% stepper %}
{% step %}

### Build a Smart Contract

Your contract should be capable of requesting and managing a flash loan.
{% endstep %}

{% step %}

### Execute Operations

The contract executes the necessary operations and repays the loan with interest and fees within the same transaction.
{% endstep %}
{% endstepper %}

For detailed guidance on executing flash loans, refer to our developer documentation.

### **Execution Flow of a Flash Loan**

{% stepper %}
{% step %}

### Contract Request

Your contract requests a flash loan from the Pool, specifying the amount and reserve.
{% endstep %}

{% step %}

### Funds Transfer

The Pool transfers the requested funds to your contract and triggers `**executeOperation()**`.
{% endstep %}

{% step %}

### Operation Execution

Perform your planned operations using the borrowed funds.
{% endstep %}

{% step %}

### Repay the Loan

Approve the Pool to pull the loan amount plus fees from your contract, completing the transaction in one block.
{% endstep %}
{% endstepper %}

## **Applications of Flash Loans**

* **Arbitrage:** Exploit price differences across exchanges without upfront capital.
* **Position Liquidations:** Liquidate positions without needing to front the repayment capital.

## **Flash Loan Fees**

Flash loan fees start at 0.1% and can be adjusted via Governance Vote. These fees contribute to the protocol's stability and are shared between liquidity providers and the treasury.