Flash loan provider
Arbitrage
| Cost component | USDT | % of loan |
|---|
Break-even analysis
Minimum price spread needed to profit at different loan sizes:
| Loan size | Min spread needed | Gross at current spread | Net profit |
|---|
How flash loan arbitrage works
A flash loan lets you borrow any amount from a liquidity pool within a single Ethereum transaction — no collateral required. The loan, arb, and repayment happen atomically. If you cannot repay (because the arb failed), the entire transaction reverts and you only lose gas.
Typical flow:
- Borrow $100,000 USDT from Aave (fee: $90)
- Buy token X on Uniswap at $100 → receive 1,000 X (fee: $300)
- Sell 1,000 X on SushiSwap at $100.50 → receive $100,200 (fee: $301.50)
- Repay $100,090 to Aave
- Net profit: $100,200 − $100,090 − $300 − $301.50 − gas
Why most arbs fail: By the time you spot a spread, hundreds of MEV bots are competing for the same opportunity. Profitable flash loan arbs on mainnet require custom smart contracts, private mempools (Flashbots), and sub-second execution. This calculator shows the economics — execution is a separate engineering challenge.
See also: Cash & carry arbitrage · Funding rate arb · Network fees
Frequently asked questions
What is a flash loan?
A flash loan is an uncollateralised DeFi loan where you borrow, use, and repay the funds within a single transaction block. If the repayment fails, the entire transaction reverts. Aave charges 0.09%, Balancer 0%, dYdX ~0 wei.
How is flash loan arbitrage profit calculated?
Net profit = (loan × price diff %) − flash loan fee − swap fee DEX A − swap fee DEX B − gas. A $100k loan with 0.5% spread, 0.09% Aave fee, 0.3%+0.3% swap fees, and $50 gas = $500 − $90 − $300 − $300 − $50 = −$240. Not profitable.
What flash loan fee does Aave charge?
Aave V3 charges 0.09% on the borrowed amount. Balancer flash loans are free (0%). dYdX Solo charges 2 wei (~zero). Check the protocol docs as fees can change via governance.
Why do most flash loan arbs fail?
The price difference between two DEXs is usually smaller than the combined fees. Profitable opportunities exist only when a large trade creates a temporary spread above ~0.8–1.5% on Ethereum mainnet. On L2s, lower gas makes smaller spreads viable.
What is the minimum price difference needed to profit?
Min spread = flash_loan_fee + swap_fee_A + swap_fee_B + (gas / loan × 100%). With Aave + two Uniswap swaps on mainnet, minimum is ~0.7–1% + gas. On Arbitrum, gas drops to $0.10–$1, making smaller spreads viable on larger loans.
Can I execute flash loan arbitrage manually?
No — flash loans execute atomically in a single transaction. You must write a smart contract. If repayment fails at step 4, the entire transaction reverts and you only lose gas.