Furucombo: How to Use Flash Loans Like a Hacker? | Project introduction
Written by: 0x26
As Harvest Finance was arbitraged by Flashloan Affected by the platform’s loss of 24 million US dollars, Flash Loan once again returned to the public eye. Many users have the same pessimistic impression of flash loans to hackers as Bitcoin does to the dark web. In fact, the original design of Flash Loan is to allow developers to borrow at will without providing collateral. However, under the excavation of many witty Ethereum developers, flash loans are used as arbitrage between decentralized exchanges, or to provide funds for hackers to exploit vulnerabilities.
So, novice users have the opportunity to use flash loans and other tricks like hackers or advanced players who understand smart contracts operation? Don't worry, take this opportunity to learn about Furucombo, a composable DeFi tool, and you will also create a set of exclusive DeFi combinations including flash loans.
provided by Furucombo platform Combinable options covering 11 different protocols up to 39 different options.
We'll cover all the basics you need to know how to create fancy action combinations. Before we start, let's talk about what is a Furucombo?
Furucombo is a tool built for DeFi users, just like building your own DeFi Lego bricks, without programming In this case, just drag and drop to design your own DeFi strategy. It visualizes the complex DeFi protocol as a multi-layered composition of operations. Users only need to input/output the relevant token amount, and set the multi-layer operation sequence (we call it "Lego block combination"), and then Furucombo will package all the data sets into one transaction and send it out. It is a great tool for users who want to perform operations across different protocols, especially those who want to take advantage of flash loans.
According to the official introduction, its transaction volume has exceeded 100 million US dollars.
In short, for users who are not familiar with code but can implement logic design, you can use Furucombo without code Directly design and implement related DeFi operation combinations. At the same time, the platform can also simplify the user process, which will be covered in Explore.
Basic introduction to Furucombo page
To start creating an effective combo, the first step is to choose a platform ( such as Uniswap). Click the "+" in the Lego block, and then many options for platforms and specific operations will pop up. Here you can choose which DeFi protocol you want to use. Just like using a certain platform directly, the corresponding operations under each protocol need to set the corresponding amount. The search function at the top supports searching by DeFi protocol name, DeFi operation (exchange token/Swap, increase liquidity Add Liquidity, etc.) or token name supported by a specific DeFi protocol (search for Crv, and all platforms that support Crv will be displayed) .
Initial Fund
When you start to set up the Cube, you will see A section called "Initial Funding". As shown above, 1ETH is exchanged for 1143 CRV, which means that the user must provide 1ETH funds at the beginning of the combination to start the transaction. If there is not enough funds in the wallet, the transaction will not be executed. These ETH and CRV parameters are updated every time a LEGO block is changed.
Simply put, Initial Funds is the money needed, and You will receive is the money received.
Create a simple Furucombo combination
Step 1: Set up the multi-layered Lego set
After selecting a protocol, you will be prompted to enter your Lego block details. The input represents the amount of tokens to spend when performing this action. The output represents the amount of tokens that will be received when this action is performed. Note that the input can be tokens in the wallet, or the output of a previous LEGO block. Once the LEGO blocks are set up, they can always be edited/deleted by clicking on the pen/trash can icon in the upper right corner of each block.
Step 2: Drag and drop
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All actions you set are draggable. Just click and hold a Lego block, then drag it in the desired order. When a combination is complete and traded, actions will be performed based on the order in which the LEGO pieces are arranged.
Example: When creating a flash loan, you will see a pair of two LEGO blocks. (The first means "borrow" and the second means "repay".) Next, you need to add more LEGO block operations and drag them between flash loans.
Step 3: Connect Wallet
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It is possible to create a LEGO set without connecting to a wallet. However, if you really want to use this combination, you must connect the wallet. Just click on the last Lego block with the wallet icon on it and you can connect to your own wallet.
Step 4: Send Combo
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The complete process of sending a combination is:
1. Click Approve. When the initial token is ERC20, only one approval operation is required.
2. Click "Send", then Furucombo will estimate this DeFi Lego combination. If the transaction fails, a message will pop up to remind you. Instead, you'll see a transaction request pop up on your wallet asking for a signature.
3. After the combination is sent successfully, the button will change to " New Combo", and a transaction link will pop up information. When you see these changes, congratulations, you are already familiar with the initial DeFi combos.
Then let us go one step further and explore more combinations and possibilities!
Using Furucombo for Flashloan
About Flashloan?
The design of Flash Loan is to allow developers to borrow at will without providing collateral. The entire loan and repayment process will be completed in one transaction! Developers can lend funds from the savings pool of the agreement in Aave , the condition is that after the transaction ends, the liquidity lent from the fund pool will be returned to the pool as it is. If that much liquidity cannot be returned, the transaction will fail and be rolled back, ensuring that the funds in the savings pool will not be lost.
Flash loans have many interesting uses, including:
Arbitrage among decentralized exchanges;
Close positions on various lending platforms (Compound, dYdX, etc.);< /p>
Rebalancing, eg: lend DAI from the Aave protocol, close your MakerDAO collateralized debt positions and get your collateral back, deposit these collaterals in Compound, lend DAI , and then return DAI and some handling fees to Aave.
Before we begin, here are some important things to understand:
For arbitrage traders, Furucombo has undoubtedly lowered the barriers to entry for building a DeFi Lego portfolio, providing all the necessary elements to create an arbitrage strategy, including Flash loans used by programmers. However, please remember that Furucombo will not find opportunities for users, it is only a tool to allow users to better participate in DeFi and break down some industry barriers. Users need to find arbitrage opportunities by themselves. (Rhythm note, when a profitable system/method is familiar and used by more and more people, this method will gradually become mediocre or even ineffective.)
The examples we use below are officially provided and are currently invalid. As mentioned above, this article only provides tools, and users need to find more opportunities. Let's use a practical case to take you into the world of flash loans.
Flash loan conditions:
The first step is to find an arbitrage opportunity with a price difference greater than 0.09%, so as to pay the lightning loan fee.
In the second step, a part of ETH is left in the wallet to pay enough gas fees.
On Furucombo, two pools are supported, Uniswap V1 and Kyberswap.
Spread difference: 20+%.
1 DAI = 0.9927 SUSD on Kyberswap. 1 DAI = 0.8057 SUSD on Uniswap V1.
Buy low and sell high: Buy SUSD on Uniswap V1 and sell it on Kyberswap, arbitrage is as simple as that.
Now let's start creating the portfolio. The complete combination should look like this:
1. Borrow 100DAI from Flashloan;
2. Exchange 100DAI to 122.83649sUSD on Uniswap ;
3. Exchange 122.83649sUSD to 122.83429DAI on Kyberswap;
4. Return 100.09DAI to Flashloan;
5. Get a profit of 22.74429DAI.
Actually set in Furucombo
As mentioned in the tutorial, after completing the settings, choose to connect to the wallet and click Send to complete the use Profitable operation of flash loan.
Just like the Harvest Finance incident yesterday, the above example of Uniswap V1 and Kyber showed the potential of cross-platform arbitrage possibility. However, it should be pointed out that Harvest is an attacker who artificially manipulates the exchange ratio of the market and profits from it. The example in this article is to discover the imbalance between supply and demand in the actual market and contribute to the smoothing of the price difference in the market. At the same time, yesterday's Harvest event cannot be replicated through this platform.
New Explore interface
At the same time, in addition to Combo, Furucombo has also recently added the Explore interface. In this interface, there are some existing combinations for users to use for reference. Users can sort by APY (yield rate) and Liquidity (liquidity). Rhythm found that, interestingly, there are also some combinations with negative returns. As of press time, the Combo with the lowest yield provided by Explore is -38.67%. After all, a tool is just a tool, what matters is the designer behind it.
The simplest Combo, using this Combo can quickly add liquidity , instead of users calculating the amount themselves, swapping out DAI with ETH, and then adding liquidity to Uniswap.
Reference reading:
Flash Loans: What can an Ethereum transaction do?
Tutorial: Create Flashloan Combo on Furucombo
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