Types of Tokens and Digital Assets BBLC Practice Questions (Page 1)

Questions 1–5

1. 1foundation · easy

   What is a key characteristic that distinguishes a security token from a utility token?

   • ASecurity tokens are always backed by physical commodities.
   • BSecurity tokens are designed to be spent as a medium of exchange.
   • CSecurity tokens are subject to securities regulations.
   • DSecurity tokens are used exclusively for voting on protocol changes.
   Reveal Solution Discussion Select an answer first
2. 2foundation · easy

   Which token type is primarily defined by its function of granting holders the right to use a specific blockchain-based platform or service?

   • AUtility token
   • BPayment token
   • CSecurity token
   • DGovernance token
   Reveal Solution Discussion Select an answer first
4. 3application · medium

   A startup is launching a decentralized file-storage platform. They plan to sell tokens that users must hold to upload and download files, and the token supply will be fixed. The founders want to avoid securities regulation. Which token classification best fits their design?

   • AGovernance token, because holding it grants usage rights.
   • BPayment token, because users must hold it to transact on the platform.
   • CUtility token, because it grants access to the platform's storage service.
   • DSecurity token, because the fixed supply creates investment value.
   Reveal Solution Discussion Select an answer first
5. 4application · medium

   A decentralized autonomous organization (DAO) wants to incentivize active participation in governance. The DAO plans to reward members with tokens that allow them to vote on proposals. Which token design would best encourage long-term participation?

   • AIssue governance tokens with a vesting schedule that rewards continuous participation
   • BIssue security tokens that represent ownership in the DAO
   • CIssue a fixed supply of governance tokens to all members at launch, with no further rewards
   • DIssue payment tokens that can be used to buy governance tokens
   Reveal Solution Discussion Select an answer first
6. 5application · medium

   A fintech startup is creating a token that represents a share in a real estate investment trust (REIT) and also provides holders with discounts on the platform's property-management services. The token is offered to accredited investors. How should the token be classified?

   • AUtility token, because it provides a service discount.
   • BSecurity token, because it represents an investment in a REIT.
   • CAsset-backed token, because it is backed by real estate.
   • DPayment token, because it can be used to pay for services.
   Reveal Solution Discussion Select an answer first