Flash Swaps

What are Flash Swaps?

Flash swaps let you temporarily borrow any token from Zealous Swap with no upfront cost! You can use these tokens however you want during your transaction, as long as by the end you either:

• Pay for the borrowed tokens with the corresponding pair tokens, OR

• Return the borrowed tokens plus a small fee

This feature eliminates the need for initial capital and removes unnecessary constraints when performing complex transactions on Zealous Swap.

How Can You Use Flash Swaps?

Arbitrage Without Capital

One exciting use of flash swaps is performing arbitrage trades without needing your own money upfront. Arbitrage helps keep Zealous Swap prices aligned with the wider market, and flash swaps make this opportunity available to everyone, not just those with large capital.

Example: Imagine Zealous Swap is selling 1 KAS for 200 USDT, but on another exchange, 1 KAS can buy 220 USDT.

Without flash swaps, you'd need 200 USDT to take advantage of this 20 USDT profit opportunity. With flash swaps, here's how anyone can do it:

1. Borrow KAS: Use a flash swap to temporarily withdraw 1 KAS from Zealous Swap

2. Trade Elsewhere: Sell that 1 KAS on the other exchange for 220 USDT

3. Pay Back: Return 200 USDT to Zealous Swap (the amount required to cover your 1 KAS loan)

4. Keep Profit: You're left with 20 USDT profit!

Quick Leverage for Lending Platforms

Flash swaps can make borrowing against collateral much more efficient.

Example: Let's say you want to use a lending & borrowing protocol, where you can deposit KAS and borrow USDT against it:

1. Without flash swaps: You'd need to repeatedly deposit KAS, borrow USDT, convert USDT to more KAS, and deposit again - a slow and gas-expensive process.

2. With flash swaps: If you have 3 KAS and want 2x leverage, you can:

   • Flash swap to borrow 3 more KAS (temporarily)

   • Deposit all 6 KAS into the ending & borrowing protocol

   • Borrow 800 USDT (based on the ending & borrowing protocol's collateral rules)

   • Use 605 USDT to pay back your flash swap

   • Keep the remaining 195 USDT as your safety margin

This accomplishes in one transaction what would otherwise take multiple steps!