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What are Flash Loans?

Flash loans are uncollateralized loans that must be borrowed and repaid within a single transaction. They enable solvers to access large amounts of capital without upfront collateral, provided the loan is fully repaid by the end of the transaction execution. The Flash-Loan Router allows CoW Protocol solvers to execute settlements with the ability to use funds from one or more flash loans, enabling more capital-efficient trading strategies.

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Supported Providers

The router currently supports two types of flash loan providers:

ERC-3156

Any lender compatible with the ERC-3156 standard interface, including Maker’s Flash Mint Module.

Aave

Aave Protocol flash loans with native integration.

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Provider Addresses

All contracts are deployed deterministically with CREATE2 and share the same addresses across supported networks:
ContractAddress
FlashLoanRouter0x9da8B48441583a2b93e2eF8213aAD0EC0b392C69
AaveBorrower0x7d9C4DeE56933151Bc5C909cfe09DEf0d315CB4A
ERC3156Borrower0x47d71b4B3336AB2729436186C216955F3C27cD04
See the networks.json file for deployment details.

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How Flash Loans Work

The flash loan lifecycle follows this sequence:
  1. Request: Solver calls flashLoanAndSettle() with loan specifications
  2. Borrow: Router requests loans from specified providers via borrower adapters
  3. Execute: Settlement executes with access to borrowed funds
  4. Repay: Settlement returns borrowed funds plus fees to lenders
  5. Verify: Transaction reverts if any loan cannot be repaid
Each flash loan is processed sequentially, with the settlement executing only after all loans are obtained.

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Loan Specification

Each flash loan request requires the following parameters:
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amount
uint256
required
The amount of tokens to borrow
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token
address
required
The ERC-20 token contract address to borrow
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lender
address
required
The flash loan provider contract (e.g., Balancer, Aave, Maker)
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borrower
address
required
The adapter contract that makes the specific lender implementation compatible with the router

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Fund Management

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Accessing Loaned Funds

The only way to move funds out of a borrower is through ERC-20 approvals: 
// Called during settlement to approve fund transfers
borrower.approve(token, spender, amount);
Best Practice: Set unlimited approvals once for the settlement contract and reuse them across multiple settlements to save gas.

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Repayment Process

Repayment mechanisms vary by provider:
  1. Transfer: Settlement transfers borrowed funds back to the borrower
  2. Approve: Settlement sets an approval for the lender to spend borrower’s funds
  3. Pull: Lender pulls funds back using transferFrom after settlement completes
Inability to repay a flash loan will cause the entire transaction to revert. Ensure your settlement logic accounts for:
  • Loan principal amounts
  • Provider-specific fees
  • Sufficient token balances in borrower contracts

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Adding New Providers

Support for additional flash loan providers can be added by implementing a new borrower adapter. See Borrower Adapters for implementation details.

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Next Steps

Router Design

Learn about the router’s execution flow

Borrower Adapters

Understand the adapter architecture
Last modified on March 4, 2026