Multistep Aave flashloan
- Aave liquidation
- Aave flashloan Aave
Is it possible for multistep Aave flashloan? Higher interest rates are given to loans that have more transactions and duration all being monitored on blockchain so that the person doesn't just sit on the loan and do nothing or just runs with the money. Plus it gives a legitimate usecase for defi to be more transparent than a credit card. No more than six transactions can occur for the loan. if more than 6 transactions are taken, this results in an over transaction default and the wallet that received the loan gets the wallet liquidated of funds at potential loss. If the person fails to repay the loan within the allocated time, whatever amount left of the loan is liquidated from the loan recipient at potential loss.
Example:
- Get loan of 100BUSD
- Convert to token
- Stake tokens with interest
- Unstake token
- Swap to loan token
- Repay loan
There's more freedom for what you can do at the cost of more interest and limited amount of possibilities when compared to a standard collaterialized loan or credit based Aave defi loan that are in the works like with masa finance
Extended flash loans in theory allow for greater yields while staking, something traditionally done by whales and giving more flexibility while minimizing risk
Answers 1
This wouldn't be possible. What makes Aave flashloan possible is that the pool has no risk of losing funds because if the flash borrow is not repaid by the end of the transaction, the transaction reverts and it's as if the borrow never happened. What you're proposing is charging interest for taking on an undercollateralized borrow, but if there's no collateral, there's nothing to liquidate and nothing to ensure the user will repay their interest. The only way this could work is if you enforce that the borrow position is over-collateralized, and then you're right back to the original Aave Protocol.