What is a flash loan arbitrage bot and how does it work?

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What is a flash loan arbitrage bot and how does it work?

travizsmith
So, what's a flash loan arbitrage bot? In simple terms, it's like a helper for decentralized apps such as Uniswap, PancakeSwap, and 1inch. Here's how it works:

1. Flash Loan: Imagine getting a loan instantly. With a flash loan, you borrow money from the platform, use it to make a profit, and then return the borrowed amount – all in one go.

2. Arbitrage Trading Bot: This bot does the trading for you without you having to watch the screen. It buys at a lower price on one exchange and automatically sells at a higher price on another exchange. And guess what? It all happens on decentralized exchanges. That's the essence of a flash loan arbitrage bot – making the most of opportunities in the crypto world!