The borrower didn't have to put collateral for the fund they borrowed if they can return it within the same transaction block? In amateur non-technical dumb way, how long does a same transaction block span? One day? One week? One minutes?
Depending on the blockchain, the block time is different:
on ETH - block time is an average of 15 seconds
on BSC - the block time an average of 3 seconds
This is the time frame you have the loan in your wallet and build your own trading transactions.
It looks short time, but it's enough to execute an arbitrage trade, for example.
That's what confuses me, let's take BSC's blocktime for an instance, with 3 seconds window, we were expected to borrow, initiate whatever transaction we needed the fund for, close the transaction, and returned the fund back? Honestly curious, is it practically possible?
Yap, that's possible and heavily used right now by traders and arbitrageurs. This is obvious not a manual task you can do it using a UI. These are tasks that can be done with automated scripts.