Use Cases and Future Trends in Tokenization BDC Practice Questions (Page 5)

Questions 21–25

1. 21application · medium

   A company wants to tokenize a piece of real estate to enable fractional ownership. They are considering using a security token offering (STO) on a public blockchain. Which of the following is a primary benefit of this approach compared to a traditional real estate investment trust (REIT)?

   • ATokens eliminate the need for a custodian or trustee.
   • BTokens guarantee a higher return than a REIT.
   • CTokens are automatically exempt from securities regulations.
   • DTokens can be traded 24/7 on global markets, potentially increasing liquidity.
   Reveal Solution Discussion Select an answer first
2. 22expert · hard

   A global asset manager is tokenizing a real estate fund and wants to offer it to investors in multiple jurisdictions. They face conflicting requirements: some regulators require investor accreditation checks, while others require data residency within their country. The asset manager wants to use a public blockchain for liquidity. Which approach best balances these constraints?

   • AUse a private blockchain hosted in each jurisdiction to ensure data residency, but this limits cross-border liquidity.
   • BUse a single public blockchain and store all investor data on-chain to meet transparency requirements.
   • CUse a public blockchain with smart contract-based transfer restrictions and a decentralized identity solution that enforces jurisdiction-specific rules.
   • DIssue tokens on a public blockchain without any restrictions and rely on investors to self-certify.
   Reveal Solution Discussion Select an answer first
4. 23application · medium

   A luxury watch manufacturer wants to tokenize each watch to prove authenticity and enable resale. They want buyers to be able to verify the watch's history and transfer ownership securely. Which tokenization approach is most suitable?

   • AUse a private database to track ownership and history.
   • BIssue an ERC-20 token for each watch model.
   • CCreate a QR code that links to a website with the watch's details.
   • DMint an NFT for each watch with metadata that includes provenance and service history.
   Reveal Solution Discussion Select an answer first
5. 24application · medium

   A supply chain consortium wants to tokenize goods to improve traceability. They are evaluating whether to use a public or private blockchain. Which factor is most important when deciding between the two?

   • APrivate blockchains are not interoperable with other systems, so they should be avoided.
   • BPublic blockchains are always faster and cheaper for supply chain applications.
   • CPublic blockchains are more secure because they are decentralized, so they are always the best choice.
   • DPrivate blockchains provide better control over who can read and write data, which is often required for confidential business information.
   Reveal Solution Discussion Select an answer first
6. 25application · medium

   A company wants to tokenize a portfolio of illiquid assets, such as private equity and real estate, to make them accessible to a wider range of investors. What is the primary benefit of tokenization in this context?

   • AIt eliminates the need for regulatory compliance.
   • BIt increases liquidity by enabling fractional ownership and secondary trading.
   • CIt removes the need for a trusted third party to verify ownership.
   • DIt guarantees that the value of the asset will increase.
   Reveal Solution Discussion Select an answer first