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Imagine instantly borrowing funds without collateral! That's the power of a flash loan. A flash loan arbitrage bot is a smart tool that uses these loans to quickly take advantage of tiny price differences for the same cryptocurrency across different decentralized exchanges (DEXs). Think of it like buying low on one exchange and immediately selling high on another, all within a single transaction. By automating this process, the bot can rapidly identify and execute these arbitrage opportunities, aiming to squeeze out profits from even the smallest price discrepancies. While the capital needed upfront is low thanks to flash loans, understanding the market and the bot's mechanics is key to potentially maximizing those profits.
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