Which statement accurately distinguishes between fungible and non-fungible tokens?

Fungible tokens are stored on-chain, while non-fungible tokens are stored off-chain.

Fungible tokens are interchangeable and identical, while non-fungible tokens are unique and not interchangeable.

Fungible tokens are unique and indivisible, while non-fungible tokens are interchangeable and divisible.

Fungible tokens are only used for payments, while non-fungible tokens are only used for digital art.

A company is deciding between tokenizing its loyalty points as fungible tokens or as non-fungible tokens. The loyalty points are earned based on purchase amounts and can be redeemed for discounts. Which approach is more appropriate, and why?

Fungible tokens, because they can be traded on secondary markets

Non-fungible tokens, because they can store redemption history

Fungible tokens, because loyalty points are identical and interchangeable

Non-fungible tokens, because each point is unique

A company wants to tokenize a portfolio of art pieces. Each piece is unique, but they want to allow investors to buy fractional shares of each piece. They also need to comply with securities regulations. Which approach best balances these requirements?

Create ERC-721 NFTs and sell them directly to investors

Create a single ERC-20 token for the entire portfolio

Create an ERC-1155 contract with a fungible token ID for each art piece

Create an ERC-721 NFT for each art piece, then issue fungible ERC-20 security tokens representing fractional ownership of each NFT

A marketplace for digital art wants to allow artists to mint limited-edition prints. Each print is identical, but the total supply is limited to 50 copies. The marketplace also wants to allow collectors to trade these prints. Which token standard is most appropriate for this use case?

ERC-20 with a total supply of 50 tokens.

ERC-1155 with a token ID for the artwork and a supply of 50.

ERC-777 with a total supply of 50 tokens.

ERC-721 with 50 separate token IDs, one for each print.

EC-CouncilBlockchain Developer Certification

Domain 4Objective 4

Types of Tokens and Digital Assets BDC Practice Questions (Page 5)

Part of the Cryptomining, Tokenization, and Digital Assets domain, which makes up ~10% of our current practice bank.

36questions here

8free pages

6concepts

Questions 21–25

21foundation · easy
Which statement accurately distinguishes between fungible and non-fungible tokens?
Select an answer first
22expert · hard
A company is deciding between tokenizing its loyalty points as fungible tokens or as non-fungible tokens. The loyalty points are earned based on purchase amounts and can be redeemed for discounts. Which approach is more appropriate, and why?
Select an answer first
23expert · hard
A company wants to tokenize a portfolio of art pieces. Each piece is unique, but they want to allow investors to buy fractional shares of each piece. They also need to comply with securities regulations. Which approach best balances these requirements?
Select an answer first
24expert · hard
A marketplace for digital art wants to allow artists to mint limited-edition prints. Each print is identical, but the total supply is limited to 50 copies. The marketplace also wants to allow collectors to trade these prints. Which token standard is most appropriate for this use case?
Select an answer first
25application · medium
A fintech company is creating a digital representation of a fiat currency (e.g., USD) on a blockchain for instant cross-border payments. Each digital unit must be pegged 1:1 to the fiat currency and be fully redeemable. What type of digital asset is this?
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