$50M uncollateralized atomic loans do exist

Flashloans are one of the most elegant concepts in DeFi. They allow you to borrow any amount of assets with 0% upfront collateral, as long as you return them within the same transaction. If you fail to repay, the entire transaction reverts effectively making the loan risk-free for the protocol. So for example you can get a flashloan for $50M and do some fancy tx with it.

Why they're cool

• No collateral required — borrow millions without putting anything down
• Atomic execution — everything happens in one tx or nothing happens
• Self-liquidation — pay off underwater positions without capital
• Protocol interactions — morpho, aave, uniswap all in one tx

Morpho Flashloans

Morpho provides flash loans through its bundled gateway. Here's a minimal example:

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.19;

interface IMorpho {
    function flashLoan(
        address asset,
        uint256 amount,
        bytes calldata data
    ) external;
}

interface IERC20 {
    function transfer(address to, uint256 amount) external returns (bool);
    function balanceOf(address account) external view returns (uint256);
}

contract FlashLoanArbitrage {
    IMorpho public constant MORPHO = IMorpho(0x7777777777777777777777777777777777777777);

    function executeArbitrage(
        address token,
        uint256 amount,
        address dexA,
        address dexB
    ) external {
        bytes memory data = abi.encode(dexA, dexB);
        MORPHO.flashLoan(token, amount, data);
    }

    function onMorphoFlashLoan(
        address sender,
        address asset,
        uint256 amount,
        uint256 fee,
        bytes calldata data
    ) external {
        (address dexA, address dexB) = abi.decode(data, (address, address));

        // tx logic in here

        uint256 repayAmount = amount + fee;
        require(IERC20(asset).balanceOf(address(this)) >= repayAmount, "repay failed");
        IERC20(asset).transfer(address(MORPHO), repayAmount);
    }
}

The key insight is that onMorphoFlashLoan gets called during the flash loan. You have amount to use, and you must repay amount + fee at the end. The beauty is in the atomicity, if anything fails, the whole tx reverts and nobody loses.

That's it. Borrow, do your thing, repay all in one transaction. How fucking cool is that.

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