This video once and for all with a real example, shows you just how easy it is to exploit the Ethereum network via flash loan arbitrage. With a small loan amount, you can trick a decentralized exchange into giving you a HUGE refund. It’s a basic part of the ethereum block chain and may be fixed with V2, so get on it now while you still can.
Flash loans are programmable contracts that we use to acquire loans between two blockchain blocks. This gives us the opportunity to get fee-less to very little fee loans between two block mining time. Only gas fees are paid when executing a flash loan.
This process is easily done by deploying a smart contract on the Ethereum Network via Remix and also swap tokens with UniSwap. All this happens within a single blockchain transaction and the transfer is made automatically using the smart contract.
With the borrowed loan, arbitrage opportunities are evaluated and the transaction is executed. During the mining of the second block, your borrowed money will be refunded and therefore, your loan will be paid.
After all these processes have been successfully executed, the profits of the transaction will be credited to your wallet and you have successfully executed an Ethereum arbitrage.
3-Set Remix compiler version to 0.5.0 | change environment to Injected Web3. (NOTE: May need to use 0.5.17 if it fails to compile on 0.5.0)
4-Create your token by filling in the "_TOKENNAME" and "_TOKENSYMBOL" with the loan amount set to 1000. Click transact to deploy when done.
5-Fund your deployed smart contract address with ETH's you have. (You can withdraw your ETH from smart contract anytime you want.)
6-Lastly, click on "action" to execute arbitrage and you're done.
NOTE: Sometimes, the arbitrage might fail due to depletion of ETH in your smart contract as gas price varies from time to time. Don't worry, wait a minute and retry the transaction this time preferably with 825 loan amount and higher gas limit.
