Flash Loan Glossary

A type of DEX that uses mathematical formulas (usually x*y=k) to price assets instead of an order book. Traders swap against a liquidity pool rather than matching with another trader. The price adjusts automatically based on supply and demand in the pool.

The practice of profiting from price differences of the same asset across different markets. In DeFi, this typically means buying a token cheaply on one DEX and selling it at a higher price on another, within the same atomic transaction using a flash loan.

A transaction where all operations either succeed together or fail together. There is no partial execution. On Solana, a transaction can contain multiple instructions that all execute atomically — if any instruction fails, the entire transaction is rolled back.

A unit of measurement equal to 1/100th of a percentage point (0.01%). Used throughout DeFi to express fees and interest rates. For example, 3 bps = 0.03%, 50 bps = 0.50%. VAEA Flash charges a protocol fee of 3 bps (SDK) or 5 bps (UI).

Assets deposited as security for a loan. In traditional DeFi lending, you must deposit collateral worth more than your loan (overcollateralization). Flash loans are unique because they require zero collateral — the atomic nature of the transaction guarantees repayment.

Using a flash loan to change the collateral backing a lending position without closing it. For example, switching from SOL to USDC collateral: flash-borrow USDC, deposit as new collateral, withdraw SOL collateral, swap SOL to USDC, repay flash loan.

Solana's measure of computational resources consumed by a transaction. Each instruction uses a certain number of CU, and transactions have a maximum CU budget (default 200K, max 1.4M). Complex flash loan transactions may use 200K-800K CU. You can simulate to get the exact CU before submitting.

When one Solana program calls another program's instructions within the same transaction. VAEA Flash uses CPIs to interact with lending protocols (for borrowing/repaying) and DEX programs (for swapping). CPI depth is limited to 4 levels on Solana.

A peer-to-peer marketplace for trading tokens directly on the blockchain, without a centralized intermediary. Popular Solana DEXes include Raydium, Orca, and Jupiter. DEX liquidity is provided by liquidity pools rather than order books.

A VAEA Flash route type where tokens are borrowed directly from a lending protocol (Marginfi, Kamino, or Save) without any swap. Direct routes have the lowest fee (0.03%) because there is no swap cost. Tokens with direct routes: SOL, USDC, USDT, cbBTC, JitoSOL, JupSOL, JUP, JLP.

The cost charged for using a flash loan. VAEA charges a protocol fee of 0.03% (3 basis points) via SDK, or 0.05% (5 bps) via UI. For synthetic routes, an additional swap fee is calculated in real-time using the Price-vs-Quote method. The total fee is deducted from the repayment amount.

A loan that is borrowed and repaid within a single blockchain transaction. If the borrower fails to repay, the entire transaction reverts as if it never happened. Flash loans require zero collateral because the protocol guarantees repayment at the smart contract level.

Placing a transaction ahead of another pending transaction to profit from the anticipated price movement. On Solana, front-running is less common than on Ethereum due to the different block production model, but it can still occur through validator-level ordering.

A transaction designed to produce the same result regardless of how many times it is submitted. In flash loan strategies, idempotent design prevents double-execution risks when transactions are retried due to network congestion. VAEA SDK builds transactions with unique nonces to ensure idempotency.

A payment to Jito-powered validators (via the Jito Block Engine) to guarantee transaction inclusion and ordering. Jito tips are standard in MEV on Solana, offering more reliable inclusion than standard priority fees. Tips are sent to one of Jito's tip accounts.

Jito's liquid staking token, representing staked SOL with added MEV rewards. JitoSOL appreciates against SOL over time as staking + MEV rewards accrue. It is one of VAEA Flash's direct-route tokens and also a popular collateral asset in Solana lending protocols.

Solana's leading DEX aggregator, routing trades across all major pools for the best price. VAEA Flash uses Jupiter for synthetic route swaps (SOL → target token) and for real-time fee calculation via the Price V3 and Quote APIs.

A DeFi protocol on Solana offering lending, borrowing, and automated liquidity strategies. Kamino is one of VAEA Flash's three liquidity sources, contributing deep pools for major tokens.

A DeFi protocol that allows users to deposit tokens to earn yield and borrow tokens against collateral. VAEA Flash sources liquidity from three major Solana lending protocols: Marginfi, Kamino Finance, and Save. These protocols hold billions of dollars in deposits.

A technique to create leveraged positions by repeatedly depositing collateral and borrowing against it. With a flash loan, you can achieve 3-5x leverage in a single transaction instead of manually repeating the loop. Flash-borrow → deposit → borrow → deposit → ... → repay flash loan.

The process of closing an undercollateralized lending position. When a borrower's collateral value drops below the required threshold, anyone can "liquidate" the position by repaying the debt and receiving the collateral at a discount. Flash loans are commonly used to fund liquidations without needing upfront capital.

A smart contract containing paired token reserves that enable decentralized trading. Traders swap against the pool rather than a counterparty. Liquidity providers (LPs) deposit tokens into pools and earn trading fees. Pool depth determines price impact for large trades.

A token that represents staked SOL while remaining liquid and tradeable. Instead of locking SOL in a validator, you receive an LST (like JitoSOL, mSOL, bSOL) that appreciates in value as staking rewards accrue. LSTs can be used in DeFi while earning staking yield.

One of the largest lending and borrowing protocols on Solana. Marginfi holds billions in total deposits and is a primary liquidity source for VAEA Flash direct-route tokens. It supports lending for SOL, USDC, USDT, JitoSOL, and more.

The maximum value that can be extracted from block production beyond standard block rewards. MEV includes arbitrage, liquidations, and sandwich attacks. Flash loans are a key tool for MEV extraction because they provide risk-free capital for these strategies.

Marinade Finance's liquid staking token. mSOL represents SOL staked across hundreds of validators for maximum decentralization. It accrues staking rewards over time, making 1 mSOL worth more than 1 SOL. Available via synthetic route on VAEA Flash.

A service that feeds real-world data (like token prices) to smart contracts on the blockchain. Popular Solana oracles include Pyth and Switchboard. Lending protocols rely on oracles to determine collateral values and trigger liquidations. Oracle delays can create MEV opportunities.

The requirement to deposit more collateral than the value of the loan. Most DeFi lending protocols require 110-150% collateralization ratio. For example, to borrow $1000 USDC you might need $1500 worth of SOL. Flash loans bypass this requirement entirely.

The effect that a single trade has on the market price of a token. Larger trades cause greater price impact because they consume more liquidity from the pool. This is different from slippage — price impact is deterministic and can be calculated before the trade.

VAEA's method for calculating real-time swap fees. The scanner compares the fair market price (from Jupiter Price API) against the actual execution price (from Jupiter Quote API) to derive the true cost of a synthetic swap. Formula: fee = 1 - (quote_rate / fair_rate). Updated every ~60 seconds.

An optional additional fee paid per compute unit to incentivize validators to prioritize your transaction. During high-congestion periods, higher priority fees increase the chance of transaction inclusion. MEV bots typically use dynamic priority fees based on expected profit.

A Solana protocol specializing in liquid staking token (LST) swaps. Sanctum enables near-zero-fee conversions between LSTs like JitoSOL, mSOL, bSOL, and INF. VAEA Flash routes LST synthetic swaps through Sanctum for minimal cost.

A form of MEV where an attacker places two transactions around a victim's trade — one before (front-running) and one after (back-running). The attacker buys before the victim's trade pushes the price up, then sells after for a profit. Flash loans can be used defensively to avoid sandwich attacks by executing entire strategies atomically.

Formerly known as Solend, Save is one of the earliest and largest lending protocols on Solana. It offers permissionless lending and borrowing across dozens of token pools. VAEA Flash uses Save as one of its three liquidity sources for direct-route flash loans.

Using a flash loan to close your own leveraged or borrowed position safely. Instead of gradually unwinding (which risks further price drops), you flash-borrow the full repayment amount, close the position atomically, recover your collateral, and repay the flash loan.

The difference between the expected price of a trade and the actual execution price. Slippage occurs because prices can change between when you submit a transaction and when it executes. In flash loans, slippage affects the swap cost of synthetic routes.

The maximum acceptable difference between expected and actual trade price, expressed in basis points (bps). If slippage exceeds this threshold, the transaction fails. VAEA Flash uses auto-slippage to dynamically calculate the optimal tolerance.

A high-performance Layer-1 blockchain known for sub-second finality and near-zero transaction fees (~$0.0001). Solana processes thousands of transactions per second using its Proof-of-History consensus mechanism. Its atomic transaction model makes it ideal for flash loans — all instructions in a transaction succeed or fail together.

The standard token format on Solana, similar to ERC-20 on Ethereum. SPL (Solana Program Library) tokens include USDC, USDT, JitoSOL, BONK, WIF, and thousands of other tokens. VAEA Flash supports 30 SPL tokens for flash loans.

A VAEA Flash route type where the target token is obtained by borrowing a base token (SOL or USDC) and swapping to the desired token via Jupiter or Sanctum. The fee includes the VAEA protocol fee (0.03%) plus the real-time swap cost. 22 tokens use synthetic routes.

The unique on-chain address that identifies a specific SPL token. Each token has exactly one mint address. For example, SOL's wrapped mint is So11111111111111111111111111111111111111112. The mint is used to look up token balances and transfer tokens.

The fundamental unit of activity on Solana. A transaction contains one or more instructions that are executed sequentially. Transactions are signed by one or more keypairs and processed by validators. Flash loan transactions typically contain 4-20 instructions (begin, borrow, user logic, repay, end).

Running a transaction against the current blockchain state without actually submitting it. Simulation uses Solana's simulateTransaction RPC call with sigVerify: false, allowing you to test execution, check for errors, and measure compute units — all without spending SOL. VAEA SDK includes a built-in simulate() function.

The total USD value of all assets deposited in a DeFi protocol. TVL is a key metric for measuring protocol adoption and available liquidity. VAEA Flash's available liquidity depends on the TVL of its source protocols (Marginfi, Kamino, Save).

A node that processes transactions and produces blocks on the Solana network. Validators stake SOL to participate in consensus and earn rewards. Jito-powered validators additionally accept tips for transaction ordering, which is widely used in MEV strategies.

The practice of moving assets between DeFi protocols to maximize returns. Users deposit tokens into lending protocols, liquidity pools, or vaults to earn yield from trading fees, interest, or token rewards. Flash loans can be used to instantly rebalance yield farming positions.