Comparing TradFi, CeFi, and DeFi BFC Practice Questions (Page 3)

Questions 11–15

1. 11foundation · easy

   In what way does CeFi's operational model resemble TradFi more than DeFi?

   • ACeFi platforms allow users to trade directly with each other without any platform involvement.
   • BCeFi platforms operate on public blockchains with no central authority.
   • CCeFi platforms use smart contracts to automate all services without any human intervention.
   • DCeFi platforms act as custodians and intermediaries, holding user funds and executing transactions on their behalf.
   Reveal Solution Discussion Select an answer first
2. 12application · medium

   A small business wants to issue a stablecoin pegged to its local fiat currency to facilitate faster supplier payments. The business is considering using a DeFi platform to manage the issuance and redemption. Which use case is most directly supported by DeFi in this scenario?

   • AAutomated market making, where the stablecoin is traded against other assets.
   • BPeer-to-peer lending, where the business can borrow against its receivables.
   • CProgrammable money, where smart contracts automate issuance and redemption based on predefined rules.
   • DDecentralized identity, where the business can verify suppliers without a central authority.
   Reveal Solution Discussion Select an answer first
4. 13application · medium

   A developer is building a DeFi application that allows users to trade assets without a central order book. They want to use an automated market maker (AMM) model. Which infrastructure component is essential for this application?

   • AA centralized server to match buy and sell orders.
   • BA traditional database to store user balances.
   • CA permissioned blockchain to ensure only approved users can trade.
   • DA smart contract that manages liquidity pools and pricing algorithms.
   Reveal Solution Discussion Select an answer first
5. 14foundation · easy

   Which technology infrastructure is most characteristic of DeFi applications?

   • AA private blockchain operated by a consortium of banks.
   • BA public blockchain with smart contracts that execute financial transactions automatically.
   • CA distributed ledger that requires a central authority to approve each transaction.
   • DA centralized database managed by a single financial institution.
   Reveal Solution Discussion Select an answer first
6. 15application · medium

   A startup wants to create a platform where users can lend and borrow digital assets without intermediaries, using automated interest rates based on supply and demand. Which model and technology combination is most appropriate?

   • AA CeFi exchange with an order book, because it can match lenders and borrowers efficiently.
   • BA DeFi lending protocol with smart contracts, because it automates interest rates and removes intermediaries.
   • CA centralized database with manual interest rate setting, because it is simpler to implement.
   • DA TradFi bank with a centralized ledger, because it can offer competitive interest rates.
   Reveal Solution Discussion Select an answer first