What Is Flash Loan?

A flash loan is an uncollateralized loan that must be borrowed and repaid within a single blockchain transaction. If the borrower fails to repay within the same transaction, the entire operation reverts as if it never happened. Flash loans enable complex arbitrage, liquidation, and collateral swaps without requiring upfront capital. While flash loan transactions are technically not whale activity in the traditional sense, they can move massive amounts of capital and cause sudden price dislocations. Sonar flags unusual transaction volumes that may indicate flash loan arbitrage activity.