System Architecture

Understanding the Flash Loan Router’s modular design, component interactions, and execution flow

Overview

The Flash Loan Router employs a modular design separating routing logic, lender-specific adapters, and settlement execution. This enables support for multiple flash loan providers while preserving security and predictable execution.

Components

The system consists of four main components:

1. Flash Loan Router - Core orchestrator for flash loans and settlement
2. Borrower adapters - Lender-specific contracts handling protocol differences
3. Flash loan lenders - External protocols (Aave, Maker) providing liquidity
4. CoW Settlement - Target contract executing trades

Execution Flow

The system processes settlements through four phases:

Phase 1: A solver calls flashLoanAndSettle() with loan specifications and settlement data.

Phase 2: The router requests loans sequentially from each borrower adapter, which triggers lender-specific callbacks.

Phase 3: Once all loans are received, the router executes the settlement contract with the provided data.

Phase 4: Lenders pull repayment from borrower contracts through ERC-20 transfers.

Core Security Guarantees

The router maintains these critical properties:

• Only registered CoW Protocol solvers can call flashLoanAndSettle()
• Exactly one settlement call per loan request, using unmodified data
• Sequential loan processing prevents out-of-order execution
• Atomic execution — all operations succeed or fail together

Supported Lenders

• Aave V3 via AaveBorrower
• ERC-3156 compatible providers (including Maker) via ERC3156Borrower

New lenders can be added by creating borrower contracts implementing the lender’s callback interface without modifying core router code.