Flash Minting

Flash minting is an important feature of USDXL that facilitates arbitrage opportunities and liquidations within the HypurrFi ecosystem.

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Understanding Flash Loans

Unlike traditional lending markets in HypurrFi where flash loans require available supplied assets, USDXL implements a direct flash loan mechanism through its smart contracts. This allows users to access USDXL liquidity within a single transaction, provided the borrowed amount plus any fees are returned by the end of the transaction.

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Key Features

• No prior liquidity required
• Single-transaction execution
• ERC3156 standard compliance
• Automated repayment verification

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How Flash Loans Work

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Execution Flow

1. Initiation

   • Contract requests flash loan from USDXL
   • Amount validation occurs
   • USDXL is minted temporarily

2. Operation

   • Borrowed USDXL transferred to requesting contract
   • Contract executes intended operations
   • Must approve USDXL contract for repayment

3. Completion

   • Original amount plus fee returned
   • USDXL burned
   • Transaction completes or reverts

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Implementation Guide

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1. Contract Setup

Your contract must implement the ERC3156 flash loan receiver interface:

interface IERC3156FlashBorrower {
    function onFlashLoan(
        address initiator,
        address token,
        uint256 amount,
        uint256 fee,
        bytes calldata data
    ) external returns (bytes32);
}

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2. Flash Loan Request

Three ways to initiate a flash loan:

1. From EOA (External Account)

   Copy

   function requestFlashLoan(
       address receiver,
       uint256 amount
   ) external;
   

2. From Another Contract

   Copy

   function flashLoan(
       address receiver,
       uint256 amount,
       bytes calldata params
   ) external;
   

3. From Same Contract

   • Use address(this) as receiver
   • Implement flash loan logic in same contract

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3. Completing the Flash Loan

To successfully complete a flash loan:

1. Ensure Repayment

   • Have sufficient USDXL for repayment (amount + fee)
   • Approve USDXL contract to pull funds

2. Return Correct Value

   • Must return keccak256("ERC3156FlashBorrower.onFlashLoan")
   • Validates ERC3156 compliance

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Best Practices

1. Security

   • Always verify flash loan initiator
   • Implement reentrancy guards
   • Check return values

2. Gas Optimization

   • Minimize operations within flash loan
   • Pre-calculate required amounts
   • Optimize approval flows

3. Error Handling

   • Implement proper revert conditions
   • Handle edge cases
   • Validate all parameters

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Common Use Cases

1. Arbitrage

   • Cross-market price differences
   • DEX opportunities
   • Yield optimization

2. Liquidations

   • Position management
   • Collateral swaps
   • Risk mitigation

3. Debt Refinancing

   • Position restructuring
   • Collateral optimization
   • Rate arbitrage