Flash Mint
Overview
The Flash Mint module allows users to borrow DUSD with the condition that they borrow and pay back their loan in a single transaction with a 0.1% Flash Mint Fee.
The Flash Mint Fee is a value set by Davos. This rate is initially set as 0.1% but may be adjusted as DUSD markets become more efficient.
Built-in Security Mechanism
The Flash Mint functionality of the DUSD stablecoin is designed with a strong focus on security, incorporating various measures to safeguard DUSD. Its most essential feature is that the minted amount must always be returned and burned in the same transaction. This prevents malicious activity or exploitation of DUSD.
Use Cases
While Flash Mint has many use cases, let's focus on some most popular ones:
- Flash Mint for Arbitrage
Flash Mint can allow users to borrow DUSD and swap them on a DEX where currently the price of 1 DUSD is higher than usual.
- Flash Mint for Liquidations
Flash Mint can play a vital role during liquidations. Liquidators can use Flash Mint to access the necessary DUSD tokens to repay a borrower's debt. Subsequently, they can utilize the received collateral to swap back into DUSD and repay the Flash Mint, all within a single transaction. This process allows liquidators to arbitrage the market for risk-free profits.
- Flash Mint for Farming
Flash Mint can allow users to burrow DUSD, use it to obtain a share in a pool, or put a pair of tokens in a vault all to get LP Tokens and stake them to collect the staking rewards instantly. Upon collecting the reward, users then can unstake their LP Tokens, withdraw back the liquidity, and repay the Flash Mint.
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