Web 3.0 Ecosystem and Components BDC Practice Questions (Page 6)

Questions 26–30

1. 26expert · hard

   A company is building a Web3 application that requires users to log in without a password. They want to avoid storing any user credentials on their servers. They also need to support users who lose their device and want to recover their account. Which approach best balances security and user experience?

   • AUse a Web3 wallet for authentication and provide a social recovery mechanism through trusted guardians.
   • BUse a centralized identity provider and link it to the user's wallet address.
   • CStore an encrypted backup of the private key on the company's server and allow users to reset their password.
   • DRequire users to write down their private key and enter it manually each time they log in.
   Reveal Solution Discussion Select an answer first
2. 27application · medium

   A startup wants to create a community-governed investment fund. Members will pool funds and vote on which projects to fund. The rules must be transparent, and the voting outcome must be automatically executed without a trusted intermediary. What is the most appropriate way to implement this?

   • AUse a shared spreadsheet to track votes and a separate bank account managed by the founders.
   • BSet up a traditional legal entity with a board of directors that votes on proposals.
   • CDeploy a DAO smart contract that holds the funds and executes transfers based on the results of on-chain voting.
   • DCreate a multi-signature wallet and have members vote off-chain, with a trusted admin manually executing the winning proposal.
   Reveal Solution Discussion Select an answer first
4. 28expert · hard

   A team is developing a dApp and wants to test smart contract interactions before deploying to mainnet. They need a testing environment that closely mimics the mainnet behavior, including gas costs and block production, but they also want fast iteration and the ability to reset state frequently. Which approach best balances these needs?

   • AUse a local development blockchain like Ganache or Hardhat Network for fast iteration, and periodically run tests on a public testnet.
   • BDeploy directly to mainnet and test with small amounts of funds.
   • CUse a local blockchain for all testing, because it perfectly mimics mainnet behavior.
   • DUse only a public testnet, because it is the only environment that mimics mainnet gas costs.
   Reveal Solution Discussion Select an answer first
5. 29foundation · easy

   What is the primary role of cryptocurrencies and tokens in the Web3 ecosystem?

   • AThey replace the need for smart contracts.
   • BThey are digital representations of fiat currency only.
   • CThey serve as native digital assets that enable value transfer and incentivize network participation.
   • DThey are used only for speculative trading and have no functional purpose.
   Reveal Solution Discussion Select an answer first
6. 30application · medium

   A company runs a DeFi application on Ethereum and wants to let users deposit tokens that originate on another blockchain. The team needs a mechanism that verifies the foreign chain's state without trusting a single intermediary. Which approach best fits this requirement?

   • AUse an oracle to fetch the foreign balance and update the Ethereum balance directly.
   • BAsk users to manually export their private keys and import them into the Ethereum wallet.
   • CHave a single trusted custodian hold the foreign tokens and issue an IOU on Ethereum.
   • DDeploy a cross-chain bridge that uses a light client of the source chain to verify lock/mint events.
   Reveal Solution Discussion Select an answer first