Flash mint

Unlike the classic flash loan, which lends tokens from an existing pool, a flash mint needs no prior inventory: the issuer mints the requested amount directly to the borrower's address, up to a debt ceiling set by governance. The borrower runs their logic, arbitrage, collateral refinancing, liquidations or collateral swaps, and the principal is burned at close. EVM atomicity guarantees that a mint without its matching burn never confirms.

The standardization reference is ERC-3156, which unifies the interfaces for flash lenders and flash borrowers and explicitly includes flash minting as a case. The canonical example is MakerDAO's Flash Mint Module, which mints DAI straight to the borrower's address up to the debt ceiling and burns it at the end of the transaction; its fee was cut to 0% in September 2021.

It grants access to large capital without the lender holding idle liquidity, literally creating and destroying within the block. It is useful for arbitrage, collateral swaps in CDPs and self-liquidations. It carries security considerations: the standard itself warns about bounding interactions with modules that assume constant supply, and cites Yield Protocol, where flash-minted fyDai could be used to liquidate the protocol's own vault in MakerDAO.