Question:

Flash Loans allow users to borrow any available assets without putting up any collateral, as long as the liquidity is returned to the protocol within one block transaction.

Show the frequency and volume of AAVE Flashloan use in 2022. Create a profile for a typical Flashloan user in 2022. Some of the metrics to look at could be wallet balance, transaction frequency, and dapps usage.

Overview of essay:

In this essay, the Aave flash loan feature has been evaluated in 2022. Also, the characteristics of flash loan users have been explored based on their activity and balance.

Decide to make this dashboard Live by setting Refresh rate on Daily

Aave Flashloans in 2022:

select * from ethereum.core.fact_event_logs logs

where contract_address in ('0x7d2768de32b0b80b7a3454c06bdac94a69ddc7a9', '0x398ec7346dcd622edc5ae82352f02be94c62d119')

and event_name = 'FlashLoan' and tx_status = 'SUCCESS' and block_timestamp >= '2022-01-01'

After that use the transactions of above table on from ethereum.core.ez_token_transfers to evaluate the frequency and amount of loans

Profile for a typical Flashloan user:

• Frequency of usage:

  when frequency=1 then 'One time use' when frequency>1 and frequency<=5 then '2-5 time use' when frequency>5 then 'More than 5 times use'

• DeFi programs usage:’

  from Ethereum.core.fact_transactions x join ethereum.core.dim_labels y on x.TO_ADDRESS= y.address

  where label_subtype != 'token_contract’ and LABEL_TYPE in ('dapp','defi')

• USD balance: AMOUNT_USD as balance

  when balance<100 then 'a. Under 100 USD'

  when balance>= 100 and balance< 1000 then 'b. 100-1000 USD'

  when balance>= 1000 and balance< 10000 then 'c. 1000-10000 USD'

  when balance>=10000 then 'd. Over 10000 USD'

Key findings:

This part including the summary of results for performance of flash loan feature on Aave and also the characteristics of flash loan users:

• About 2403 unique users have been used Aave flash loan feature in more than 8.43k transactions.
• The frequency of Aave flash loan usage has been enhanced on special periods as can be seen from the graph. For example, the usage of flash loans on Aave reached 277 flash loans on May 12 when the market experienced harsh times.
• The most used date of Aave flash loans was June 13th with 424 loans by 214 unique users.
• The volume of flash loans enhanced on two date. The first one was April 17th with more than 1 billion USD and the second one was June 16th with about 658 million USD.
• The grow rate of Aave flash loans has been reveals the great movement of usage specially after June 13th.
• Like said in the introduction of Aave flash loans, the flash loans only can be used on Ethereum network and the most promising destination of these loans are DeFi programs.
• The most used DeFi programs by Aave flash loans are Ens, Compound, Alchemix and synthetix respectively.
• One of the approaches to understand the behavior of Aave flash loan users is considering the frequency of usage of this feature. As shown, the most of the users, use Aave flash loans only 1 time (about 62.8% of users).
• Only small part about 8.32% of users, use Aave flash loans more than 5 times in 2022.
• The balance of Aave flash loan users has been utilize to find the characteristics of these users. According to its graph, most of the Aave flash loan users have balance under 100 USD and only 609 unique users have more than 10000 USD as their balance.

Aave and Flashloans:

Aave is an open source platform based on the Ethereum network that enables the borrowing and lending of a variety of digital assets. The format of the received loan can include from stablecoin (digital currency with a fixed price) to various types of altcoins.

Since usually the amount of liquidity in the money markets is higher than the amount of demand for loans; Much of this capital and liquidity remains unused, so Ave has introduced an flash loan feature that does not require collateral. Of course, these loans can only be used within the limits of an Ethereum block. This feature has attracted DeFi decentralized finance users who can get quick loans from Aave and use the received assets in decentralized finance.

A flash loan allows the user to borrow a large amount of digital currency without the need for collateral, but at the same time receive a loan and return the borrowed amount in the same transaction. Of course, he must also pay the fee for a block. This form of loan seems a little unusual and strange, but it is practical for many.

In fact, this feature is suitable for people who don't have a lot of capital but want to stay out of market opportunities. Specifically, we can mention the arbitrage opportunity that becomes possible by doing a blockchain transaction.