Structure, Lifecycle, and Legal Considerations of NFTs BBLC Practice Questions (Page 1)

Questions 1–5

1. 1application · medium

   A sports league is issuing NFTs as digital trading cards. They want to allow fans to trade cards, but they also want to retire certain cards from circulation after a player retires. Which lifecycle approach should they use?

   • AAllow trading indefinitely and update the metadata to reflect the player's retirement.
   • BFreeze trading by making the smart contract non-transferable.
   • CImplement a smart contract function that can burn specific token IDs when the league decides to retire a card.
   • DRely on the marketplace to delist retired cards.
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2. 2application · medium

   An NFT project is planning to mint 5,000 tokens. The team wants to ensure that the metadata is immutable and cannot be changed by the project after minting. Which approach should they take?

   • AStore metadata in a mutable smart contract variable that can be updated by the owner.
   • BStore metadata on a centralized server and update it as needed.
   • CStore metadata on a private database and provide access via an API.
   • DStore metadata on IPFS and use a content-addressed URI in the smart contract.
   Reveal Solution Discussion Select an answer first
4. 3foundation · easy

   Which legal issue is most directly related to the ownership of an NFT that represents a digital artwork?

   • ASecurities law, because all NFTs are considered investment contracts
   • BConsumer protection, because the NFT's metadata must be stored on-chain to protect buyers
   • CIntellectual property rights, because owning the NFT does not automatically transfer copyright to the underlying artwork
   • DData privacy, because the NFT's metadata contains personal data of the artist
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5. 4application · medium

   A musician is selling NFTs that represent ownership of a single digital album cover. The smart contract metadata includes a link to a high-resolution image. The musician wants to retain the copyright to the image while allowing the buyer to display it in their personal gallery. Which legal approach is most appropriate?

   • ATransfer all copyright to the buyer automatically upon the NFT sale.
   • BRely on the marketplace's terms of service to define the buyer's usage rights.
   • CInclude a license in the NFT metadata that grants the buyer a non-commercial, personal-use license to display the image.
   • DDo not include any license terms; the buyer owns the image outright because they own the NFT.
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6. 5application · medium

   A company is creating an NFT that represents a concert ticket. They want to prevent scalping by limiting resale to face value. Which NFT structure and lifecycle approach is most effective?

   • ABurn the ticket after the event to prevent resale.
   • BUse a smart contract that includes a transfer restriction function, allowing resale only at a price equal to the original purchase price.
   • CStore the ticket metadata on IPFS and include a note that resale above face value is prohibited.
   • DMint the ticket as a standard ERC-721 and rely on marketplace rules to cap resale prices.
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