CREAM Finance is bringing protocol-to-protocol flash loans to DeFi through Iron Bank. With this new development, stakeholders can become more efficient and flexible with their capital. The lending platform believes this will improve protocol-to-protocol lending across the DeFi space.
Flash loans provide access to unrestricted instant borrowing, without collateral so far the loan is repaid within one blockchain transaction. They are always very useful during arbitrage trading and collateral swapping. However, they are highly decentralized and have been a subject of controversy.
Per CREAM Finance, lending through Iron Bank will occur at a low cost without the need for collateral. In contrast, the cost of Flash loans on CREAM Finance (0.03%) is relatively cheaper than that of Uniswap (0.3%) and AAVE (0.09%).
CREAM Finance Iron Bank Has $435 Million in TVL
Flash loans have been subjected to a hot debate in DeFi because they are highly exploitable by hackers. Aave, another lending platform, has lost millions to multiple flash loans attack. In 2020, two hackers exploited flash loans to attack bZx, a margin trading protocol.
CREAM Finance is the first money market to introduce flash loans to Binance Smart Chain (BSC). Developers working on Cream BSC will have access to more than $90 million in liquidity for flash loans. At the moment, the Iron Bank has a total locked value (TVL) of $435 million.