Flash Mint
A mechanism allowing a protocol to temporarily mint new tokens within a single transaction, provided they're burned or repaid before the transaction completes.
A flash mint lets a smart contract create brand-new tokens out of thin air for the duration of a single transaction, rather than lending out tokens that already exist in a liquidity pool. If the borrower doesn't burn the minted tokens (or otherwise satisfy the protocol's repayment condition) by the end of that same transaction, the entire transaction — including the mint itself — is reverted as if it never happened.
Flash mints serve a similar purpose to flash loans (see Kaavon's "Flash Loan" glossary definition) — enabling large, capital-free arbitrage, liquidation, or collateral-swap transactions — but without needing an existing pool of liquidity to draw from, since the tokens are minted on demand. This also means a flash mint doesn't carry the same pool-depletion risk as a flash loan, though a poorly designed flash-mint module can create an oracle-manipulation or price-distortion attack surface if the temporarily inflated token supply affects on-chain pricing during the transaction.
Examples
- MakerDAO's Flash Mint Module lets users mint large, temporary amounts of DAI within a single transaction for arbitrage or liquidation purposes, provided the DAI is returned before the transaction ends.
- Because flash-minted tokens don't come from an existing pool, a protocol's flash-mint limit is a governance-set parameter rather than being capped by available liquidity.