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Optimized Gas Flash Loans

Problem

There are MEV opportunities that are not profitable because of:

  • Fee from liquidity protocols like Aave
  • Periods of high gas

This leads to unbalanced liquidity pools

A Solution

High-level features

Like the Aave v3 flash liquidity feature but

  • No fee
  • Capped liquidity
  • Gas optimized for small MEV searchers

Impact to users

  • Protocols More balanced liquidity pools because there's a long tail of small MEV opportunity that's now profitable without the flash borrow fee
    • Bad debt that doesn't make sense to liquidate right now because of fees
  • Retail users Can save gas when self-liquidation or doing a collateral swap
    • 15K gas savings = $10-20
  • New MEV searchers Can try MEV strategies without breaking the bank
  • Smol MEV searchers Can do a long tail of MEV strategies that now become profitable

Open Question

  • Where does the liquidity come from?
    • 💡
    Need to put in $50-100K in stables from donors (Flashbots, other protocols, Aave Grants DAO)

Extension

  • Using ETH directly for flash liquidity, and the letting the MEV searcher do whatever they want — as long as they return the ETH at the end
  • Community Front-end for retail users to use the optimized gas