DeFi Smart Contracts and Governance BDC Practice Questions (Page 9)

Questions 41–42

1. 41application · medium

   A DeFi protocol is planning to launch a governance token and wants to ensure compliance with data protection regulations, such as GDPR, for its users in the EU. The protocol does not collect personal data directly, but it stores transaction data on a public blockchain. Which consideration is most important for compliance?

   • AEnsure that the blockchain network is permissioned and only authorized nodes can access transaction data.
   • BStore all transaction data off-chain and only keep hashes on-chain to ensure compliance.
   • CProvide a mechanism for users to request deletion of their transaction data from the blockchain.
   • DAnonymize transaction data by using pseudonymous addresses and avoid linking them to real-world identities.
   Reveal Solution Discussion Select an answer first
2. 42application · medium

   A DeFi protocol is considering implementing a governance token and a DAO to manage protocol parameters. The team is concerned about regulatory compliance, especially regarding securities laws. Which approach best reduces the risk that the governance token is classified as a security?

   • ADistribute the token through a public sale to raise funds for development, with a promise of future protocol revenue sharing.
   • BMake the token non-transferable and only used for voting, with no market value.
   • CEnsure the token is used primarily for governance and utility within the protocol, and avoid promising profits or dividends to token holders.
   • DKeep the token supply fixed and allow only accredited investors to purchase it.
   Reveal Solution Discussion Select an answer first