Blockchain Ecosystem and Use Cases BFC Practice Questions (Page 6)

Questions 26–30

1. 26application · medium

   A bank wants to implement a self-sovereign identity solution for its customers to reduce KYC duplication and give customers control over their personal data. The solution must comply with data protection regulations that require customers to consent to each data share. Which approach best meets these requirements?

   • AA centralized database that stores all customer KYC data and shares it with any bank upon request
   • BA blockchain-based identity system where all customer data is publicly visible for transparency
   • CA biometric authentication system that stores fingerprints on the blockchain
   • DA decentralized identity system where customers hold verifiable credentials and grant selective disclosure
   Reveal Solution Discussion Select an answer first
2. 27foundation · easy

   Which of the following is a potential benefit of tokenizing a physical asset like real estate?

   • AEnabling fractional ownership and easier transferability
   • BGuaranteeing that the asset will increase in value
   • CRemoving the need for a trusted record of ownership
   • DEliminating all legal and regulatory requirements
   Reveal Solution Discussion Select an answer first
4. 28application · medium

   A developer is building a DeFi lending platform that allows users to deposit collateral and borrow stablecoins without a central authority. The platform must enforce liquidation of undercollateralized positions automatically. Which component is most critical to achieve this?

   • AA smart contract that monitors collateral ratios and triggers liquidation when thresholds are breached.
   • BA multi-signature wallet controlled by the platform administrators to manage liquidations.
   • CA centralized database that tracks all loans and manually initiates liquidations.
   • DA legal agreement that requires borrowers to voluntarily repay when undercollateralized.
   Reveal Solution Discussion Select an answer first
5. 29expert · hard

   A developer is building a DeFi aggregator that sources liquidity from multiple decentralized exchanges (DEXs) to get the best swap rates. They also want to minimize gas costs. Which approach is most effective?

   • AUse a centralized exchange to get the best rate.
   • BUse a single DEX with the highest liquidity regardless of rate.
   • CUse a smart contract that splits the trade across multiple DEXs in a single transaction.
   • DExecute separate transactions on each DEX and compare results manually.
   Reveal Solution Discussion Select an answer first
6. 30foundation · easy

   In trade finance, how can blockchain improve the process of issuing and managing letters of credit?

   • ABy digitizing and automating the exchange of documents on a shared ledger
   • BBy converting all trade documents into physical paper certificates
   • CBy replacing all banks with a single central authority
   • DBy eliminating the need for any verification of trade documents
   Reveal Solution Discussion Select an answer first