Stablecoins enable flash loan arbitrage opportunities in DeFi. Traders can borrow large sums of USDC in a single blockchain transaction, exploit price discrepancies across decentralized exchanges (DEXs), and repay the loan within the same block. For example, if Uniswap has a lower USDC/ETH price than SushiSwap, a flash loan allows instant buying and selling to capture the spread. Stablecoins’ consistent value simplifies calculations and reduces arbitrage risks compared to using volatile tokens.