Governance Models for Blockchain Networks BBLC Practice Questions (Page 9)

Questions 41–45

1. 41expert · hard

   A regulated financial institution wants to join a public blockchain network that uses on-chain governance. The institution's compliance team requires that any protocol change affecting transaction finality must be approved by a designated legal officer before it becomes effective. Which governance arrangement would satisfy this requirement?

   • AThe institution runs a validator node that votes on its behalf
   • BThe institution relies on the network's core developers to make decisions
   • CThe institution participates in on-chain voting like any other token holder
   • DThe institution uses a hybrid model where its legal officer must sign off before the institution's validator votes on a proposal
   Reveal Solution Discussion Select an answer first
2. 42foundation · easy

   What is a distinctive feature of quadratic voting?

   • AOnly token holders with a minimum balance can vote
   • BVoting power is delegated to a small group of representatives
   • CEach voter gets one vote and the majority wins
   • DVoters can allocate votes across multiple options, with the cost of additional votes increasing quadratically
   Reveal Solution Discussion Select an answer first
4. 43application · medium

   A blockchain analyst is comparing the governance of Bitcoin and Tezos. They note that Bitcoin uses off-chain governance while Tezos uses on-chain governance. What is a key trade-off between these two models?

   • ATezos's governance is less flexible than Bitcoin's
   • BTezos's on-chain governance is more efficient but can be more susceptible to plutocracy
   • CBitcoin's governance is faster but less secure
   • DBitcoin's governance is more transparent than Tezos's
   Reveal Solution Discussion Select an answer first
5. 44foundation · easy

   Which of the following is an example of an off-chain governance mechanism?

   • AA cryptographic signature that authorizes a transaction from a multi-signature wallet
   • BA proposal submitted on-chain that automatically executes if token holders vote in favor
   • CA community forum where developers and users discuss and reach consensus on a protocol upgrade
   • DA smart contract that adjusts transaction fees based on network congestion
   Reveal Solution Discussion Select an answer first
6. 45application · medium

   A blockchain network uses on-chain governance where token holders vote on proposals. A proposal to change the block reward is submitted, and the voting period is about to end. The proposal has received votes from only 5% of eligible token holders, but it is passing because the voting rule requires a simple majority of votes cast. What is the primary risk of this outcome?

   • AThe proposal will be decided by the core developers
   • BThe proposal will be delayed until more votes are cast
   • CThe proposal may not reflect the will of the majority of token holders
   • DThe proposal will be automatically rejected due to low turnout
   Reveal Solution Discussion Select an answer first