DeFi Smart Contracts and Governance BDC Practice Questions (Page 2)

Questions 6–10

1. 6application · medium

   A DAO is considering using a token-based voting system where voting power is proportional to the number of tokens held. A community member points out that this system can lead to plutocracy. Which governance mechanism would best address this concern?

   • ARequire a minimum number of tokens to vote
   • BUse a one-token-one-vote system without any changes
   • CImplement quadratic voting where voting power is the square root of tokens held
   • DAllow token holders to delegate their votes to a few large holders
   Reveal Solution Discussion Select an answer first
2. 7expert · hard

   A governance system uses a token-weighted voting mechanism. An attacker has identified that they can use a flash loan to acquire a large number of tokens just before the voting deadline and vote for a malicious proposal. The team wants to implement a fix that does not require changing the token contract. Which solution is most effective?

   • AIncrease the quorum requirement to 50% of the total token supply.
   • BUse a time-weighted voting power system that requires tokens to be held for a minimum period before they become eligible to vote.
   • CUse a decentralized oracle to verify the identity of each voter.
   • DUse a commit-reveal voting scheme to hide the vote until after the snapshot.
   Reveal Solution Discussion Select an answer first
4. 8expert · hard

   A DeFi protocol uses an automated market maker (AMM) DEX. The protocol's liquidity pool has a large amount of a newly listed token. An attacker uses a flash loan to manipulate the token's price on the DEX, causing the protocol's oracle to report a false price, and then exploits a lending protocol that uses that oracle. Which combination of defenses would best mitigate this attack?

   • ADisable flash loans on the protocol
   • BUse the spot price from the DEX and increase the liquidation threshold
   • CRely on a single centralized exchange price feed
   • DUse a TWAP oracle with a long window and add a circuit breaker that pauses lending if price deviation exceeds a threshold
   Reveal Solution Discussion Select an answer first
5. 9application · easy

   A DeFi protocol is designed to be permissionless, allowing anyone to interact with it without approval. The team is considering adding a feature that requires users to complete a KYC process before using the protocol. Which principle of DeFi would this feature most directly compromise?

   • AComposability
   • BPermissionless access
   • CTransparency
   • DCensorship resistance
   Reveal Solution Discussion Select an answer first
6. 10application · medium

   A developer is building a lending protocol that allows users to borrow assets by providing collateral. The protocol uses a liquidation mechanism to ensure loans remain collateralized. Which security consideration is most important for the liquidation mechanism?

   • AEnsure that liquidations can only be triggered by the protocol's admin.
   • BAllow anyone to trigger liquidations, but only if the borrower has been in default for at least 30 days.
   • CUse a fixed collateralization ratio of 200% and never adjust it.
   • DUse a price oracle that is resistant to manipulation to determine when a loan is under-collateralized.
   Reveal Solution Discussion Select an answer first