Problem

The current state of the flash loan ecosystem is fragmented and lacks standardization, leading to several challenges for both lenders and borrowers. The absence of a common interface results in increased integration efforts, as each flash loan provider implements its own unique approach. This lack of standardization is expected to become more problematic as the ecosystem grows, requiring more resources to maintain compatibility.

A comprehensive analysis of the existing flash loan protocols reveals significant differences in their implementations, including:

• Inconsistent syntax for initiating flash loans across different platforms.
• Variations in the relationship between the loan receiver and the callback receiver, with some protocols allowing different addresses for each role while others do not.
• Divergent repayment mechanisms, with some lenders pulling the principal and fee from the loan receiver and others requiring the loan receiver to manually return the funds.
• Disparities in the treatment of flash minting, where some lenders allow the creation of any amount of their native asset without charging a fee, effectively permitting flash loans bounded by computational constraints rather than asset ownership limitations.

Solution

To address these inconsistencies and promote a more efficient and accessible flash loan ecosystem, we propose a standardized interface that encompasses the maximum flexibility required by both lenders and borrowers. By consolidating the various approaches into a unified standard, this proposal aims to streamline the integration process, enabling borrowers to seamlessly switch between flash lenders without the need for code modifications.

To ensure that the standard achieves significant traction, wrapper contracts are being created that conform to the standardized interface, while using liquidity from existing flash lenders. Wrapper contracts are also being developed to enable other sources of liquidity for flash loans.

We envision the 7399 contracts to be the preferred venue for flash loans in the whole ethereum ecosystem.

Plans for Funding

The wrappers are simple but must be audited to encourage would-be-users. Deployment costs would also be covered by funding. All development work is done by volunteers.