Blockchain Ecosystem and Use Cases BFC Practice Questions (Page 2)

Questions 6–10

1. 6application · medium

   A decentralized finance (DeFi) platform wants to offer lending services to users in multiple jurisdictions. The platform's legal team warns that some jurisdictions require financial licenses for lending activities. What should the platform do to remain compliant while continuing to operate?

   • AUse a proxy to hide the platform's location from regulators
   • BOperate without any user verification to maintain full decentralization
   • CImplement geo-blocking and KYC/AML checks for users in regulated jurisdictions
   • DOnly allow users from jurisdictions with no regulations
   Reveal Solution Discussion Select an answer first
2. 7expert · hard

   A fintech company is evaluating whether to integrate a public DeFi protocol or a permissioned blockchain for a new lending product. They need to balance regulatory compliance, user reach, and operational control. Which approach is most balanced?

   • AUse only a public DeFi protocol to maximize user reach and avoid regulatory oversight.
   • BUse only a permissioned blockchain to ensure full compliance and control.
   • CUse a permissioned blockchain with regulatory reporting and integrate with a public DeFi protocol via a bridge for liquidity.
   • DUse a centralized database with a mobile app to avoid blockchain complexity.
   Reveal Solution Discussion Select an answer first
4. 8expert · hard

   A DeFi protocol is experiencing high gas costs and network congestion on Ethereum. The team wants to reduce transaction costs for users while maintaining security and decentralization. Which solution is most appropriate?

   • AMove to a centralized server to process transactions for free.
   • BIncrease the block gas limit on Ethereum to reduce congestion.
   • CDeploy the protocol on a layer-2 rollup that inherits Ethereum's security.
   • DUse a sidechain with a separate consensus mechanism that has lower fees.
   Reveal Solution Discussion Select an answer first
5. 9expert · hard

   A global bank is implementing a blockchain-based identity system for cross-border customers. They must comply with GDPR, which requires the right to erasure. However, blockchain is immutable. Which solution best addresses this conflict?

   • AUse a public blockchain and argue that immutability overrides GDPR.
   • BStore only hashed or encrypted identity data on-chain and keep the actual data off-chain in a separate database that can be deleted.
   • CUse a private blockchain and delete the entire blockchain when a user requests erasure.
   • DStore all personal data on-chain and rely on the right to be forgotten being ignored.
   Reveal Solution Discussion Select an answer first
6. 10foundation · easy

   Which of the following best describes the role of regulators in the blockchain ecosystem?

   • AThey write smart contracts for decentralized applications
   • BThey maintain the blockchain's consensus algorithm
   • CThey provide computing power to secure the network
   • DThey establish and enforce legal and compliance frameworks for blockchain use
   Reveal Solution Discussion Select an answer first