Dr.DODO brings you our newly launched weekly brief - DODO Megascope, which covers the following sectors:
FlashLoan allows users to borrow any available amount of assets without providing any collateral and return it to the protocol in the same transaction. FlashLoan is mainly used for arbitrage trading, but there are also some hackers using protocol loopholes to carry out flash loan attacks. After entering a bear market cycle in 2022, how will Aave FlashLoan perform?
By analyzing the loan situation and wallet interaction behavior of Aave FlashLoan since 2022, the FlashLoan user profiles can be summarized as follows:
As of July 28, Aave FlashLoan's total borrowing in 2022 has reached about $2.4B. The average daily total borrowing is about $1M, and the two abnormally large loans on April 17 and June 16 this year are all attributable to flash loan attacks. From the point of view of the number of daily active users, the number of users is positively correlated with the loan amount. On the other hand, combined with the daily transaction data of Ethereum, it is found that the active number of FlashLoan users has a strong positive correlation with the transaction volume of Ethereum. Given the arbitrage nature of FlashLoan, it is not difficult to draw this conclusion.
From the comparison of the number of loans and the loan amount, the average loan amount of new users is larger than that of Existing Users and Veteran Users. Most users have only made a few loans, but the total amount is large. While there are also a few users, who made hundreds of small loans totaling millions.
Judging from the addresses that have interacted, the proportion of short-term active users is very small, and the proportion of active users in the past 30 days is only 11.7%. Monday is the most active day of the week, and this very regular interaction may indicate that a large number of these addresses are controlled by bots.
About 35.7% of these addresses have only interacted with Aave, and most of these addresses can be considered FlashLoan bots. Among other addresses interacting across protocols, ENS and Augur interacted the most, accounting for 17.2% and 16%, respectively.
Summary: By analyzing the above interaction data of Aave FlashLoan, it can be found that FlashLoan is not a tool used by most DeFi users, due to its high threshold for use. Compared with arbitrageurs, hackers contribute a large part of the transaction volume, which makes people reflect on the meaning of FlashLoan's existence. At the same time, it also reminds us to read the audit report before using the DeFi protocol!
Conversation on SBT between @Jeremystormsky and @glenweyl:
Protolambda takes you through EIP-4844: