I really think that all of this DeFi stuff is playing with fire. If these tools scale large enough, it's easy to imagine breaking the right link in the system at the right time to cause catastrophic failures.
Remember that all complex systems operate in a degraded state. If there's ever a way that only part of a complicated swap executes correctly the trade can get really far out of position. People in Ethereum land will say things like "the smart contracts can't possibly execute if all of these conditions aren't met!", but I can assure you that lots of extremely fault-tolerant systems built by very smart people (like electronic stock exchanges) have failed in very surprising ways.
Weakly collateralized flash loans are just faster leveraged tools with all of the tradeoffs that entails.
YMMV, there's definitely a lot of money to be made.
Remember that all complex systems operate in a degraded state. If there's ever a way that only part of a complicated swap executes correctly the trade can get really far out of position. People in Ethereum land will say things like "the smart contracts can't possibly execute if all of these conditions aren't met!", but I can assure you that lots of extremely fault-tolerant systems built by very smart people (like electronic stock exchanges) have failed in very surprising ways.
Weakly collateralized flash loans are just faster leveraged tools with all of the tradeoffs that entails.
YMMV, there's definitely a lot of money to be made.
https://www.youtube.com/watch?v=SjbPi00k_ME << Relevant.