Token Issuance, Token Economics, and Market Dynamics BDC Practice Questions (Page 4)

Questions 16–20

1. 16expert · hard

   A project is choosing between an IEO and an IDO for their token launch. They want to ensure broad community participation but also need to comply with anti-money laundering (AML) regulations. Which mechanism is more suitable?

   • AIDO, because it provides immediate liquidity without KYC
   • BIEO, because it guarantees a higher token price
   • CIEO, because centralized exchanges typically have AML/KYC procedures in place
   • DIDO, because it is decentralized and avoids regulatory oversight
   Reveal Solution Discussion Select an answer first
2. 17expert · hard

   A project has a token with a fixed supply and a strong community. They are considering implementing a buy-back-and-burn program funded by platform revenues. What is the most likely effect on token value and market dynamics?

   • AIt will decrease token value because the company is spending money
   • BIt will have no effect on token value because supply is fixed
   • CIt will increase volatility because the company is manipulating the market
   • DIt will increase token value by reducing supply and signaling confidence
   Reveal Solution Discussion Select an answer first
4. 18application · medium

   A token project has completed its initial distribution and the token is trading on exchanges. The team wants to reduce the total supply to increase scarcity and signal long-term commitment. Which lifecycle action should they take?

   • AMigrate the token to a new contract address
   • BList the token on additional exchanges
   • CMint additional tokens to increase supply
   • DBurn a portion of the tokens held in the team's treasury
   Reveal Solution Discussion Select an answer first
5. 19application · medium

   A company plans to issue a token that will be sold to investors in multiple countries. They want to minimize regulatory risk. What should they do first?

   • ALaunch the token sale immediately to gain first-mover advantage
   • BUse a decentralized exchange to avoid regulatory oversight
   • CStructure the token as a utility token to avoid all regulations
   • DConsult with legal experts in each jurisdiction to determine the token's classification
   Reveal Solution Discussion Select an answer first
6. 20application · medium

   A DAO is designing a governance token. They want to prevent a single entity from gaining majority control and ensure that voting power is distributed among active participants. Which distribution strategy best achieves this?

   • ASell all tokens in a public sale to the highest bidders
   • BAllocate tokens based on contribution and participation, with a vesting schedule
   • CMint tokens only when needed for governance votes
   • DAirdrop tokens equally to all registered users
   Reveal Solution Discussion Select an answer first