DeFi Smart Contracts and Governance BDC Practice Questions (Page 3)

Questions 11–15

1. 11expert · hard

   A DAO uses a governance contract that allows token holders to vote on proposals. The contract has a 3-day voting period and a 1-day timelock. An attacker discovers they can borrow a large amount of governance tokens via a flash loan, vote on a malicious proposal, and return the loan before the transaction ends. Which combination of changes would most effectively prevent this attack?

   • AImplement a token-holding snapshot at a block before the voting period and increase the timelock to 7 days
   • BRequire a minimum number of tokens to vote and reduce the timelock to 1 hour
   • CUse a multi-sig wallet to execute proposals and keep the current voting mechanism
   • DIncrease the voting period to 7 days and keep the timelock at 1 day
   Reveal Solution Discussion Select an answer first
2. 12application · medium

   A DeFi protocol team wants to launch a governance token and allow global users to participate in DAO voting. The team is concerned about regulatory compliance. Which approach best balances decentralization with compliance?

   • AOnly allow accredited investors to participate in governance
   • BMake the protocol fully anonymous and permissionless to avoid any regulatory oversight
   • CImplement a geo-blocking mechanism that restricts users from sanctioned jurisdictions
   • DDecentralize governance completely and ignore regulatory requirements
   Reveal Solution Discussion Select an answer first
4. 13foundation · easy

   What does 'composability' mean in the context of DeFi?

   • AThe process of combining multiple cryptocurrencies into a single token
   • BThe ability of different DeFi protocols to interact and build upon each other
   • CThe requirement that all DeFi protocols use the same underlying blockchain
   • DThe ability of smart contracts to be upgraded by their owners at any time
   Reveal Solution Discussion Select an answer first
5. 14expert · hard

   A DeFi protocol's governance token is used for voting and also entitles holders to a share of protocol fees. A regulator in a major jurisdiction indicates that the token may be considered a security. The protocol team wants to reduce the likelihood of the token being classified as a security. Which action is most likely to help?

   • AMove the protocol to a fully decentralized DAO
   • BIncrease the token supply to make it less valuable
   • CRestrict trading to only a few exchanges
   • DRemove the fee-sharing feature and make the token purely for governance
   Reveal Solution Discussion Select an answer first
6. 15expert · hard

   A DAO's governance contract allows token holders to create proposals and vote. An attacker submits a proposal that, if executed, would transfer all treasury funds to the attacker. The proposal is written in a way that is difficult to understand, and many token holders vote in favor without reading the code. Which governance design change would best mitigate this proposal-manipulation risk?

   • AIncrease the voting period to allow more time for review
   • BUse a multi-sig to execute proposals without community voting
   • CRequire a proposal to include a plain-language summary and a security audit before voting begins
   • DAllow only the core team to create proposals
   Reveal Solution Discussion Select an answer first