Comparing TradFi, CeFi, and DeFi BFC Practice Questions (Page 5)

Questions 21–25

1. 21expert · hard

   A fintech company is designing a digital wallet for a diverse user base, including tech-savvy millennials and elderly users who are not familiar with blockchain. They want to offer both TradFi and DeFi services. Which approach best balances usability and accessibility?

   • ACreate two separate apps, one for TradFi and one for DeFi, to keep the user experience clean.
   • BOffer only TradFi services to ensure simplicity and regulatory compliance.
   • CProvide a single interface that abstracts blockchain complexity, with a simple mode for basic transactions and an advanced mode for DeFi.
   • DOffer only DeFi services to keep the product innovative and attract tech-savvy users.
   Reveal Solution Discussion Select an answer first
2. 22expert · hard

   A pension fund is considering allocating a small percentage of its portfolio to DeFi yield-generating protocols. The fund's mandate requires capital preservation and high liquidity. The investment committee is concerned about the trade-off between yield and risk. Which of the following is the most balanced recommendation?

   • AAllocate to DeFi protocols with the highest yield to maximize returns.
   • BAvoid DeFi entirely because it is too risky for any institutional investor.
   • CInvest in DeFi through a CeFi platform to eliminate all risks.
   • DAllocate a small portion to audited, established DeFi protocols with conservative strategies, while maintaining a majority in traditional assets.
   Reveal Solution Discussion Select an answer first
4. 23application · medium

   An institutional investor is considering allocating funds to a DeFi yield aggregator. The investor's risk team has flagged concerns about smart contract vulnerabilities and the protocol's dependence on multiple external price oracles. Which type of risk is the team most directly assessing?

   • ACustody risk, because the investor's funds are held by the yield aggregator.
   • BSmart contract risk and oracle risk, which are forms of technology risk unique to DeFi.
   • CSystemic risk, because the yield aggregator is too interconnected with other protocols.
   • DCounterparty risk, because the investor is relying on the yield aggregator's operators to manage funds.
   Reveal Solution Discussion Select an answer first
5. 24application · medium

   A software architect is designing a system for a consortium of banks to share a tamper-evident record of interbank transactions. The architect is considering a permissioned blockchain versus a public DeFi blockchain. The consortium requires that only member banks can validate transactions and that the network can be upgraded with a governance vote. Which infrastructure is most appropriate?

   • AA public DeFi blockchain, because it provides the highest level of decentralization and security.
   • BA centralized database, because it is simpler and can be controlled by the consortium.
   • CA hybrid of public and private chains, because it combines the benefits of both.
   • DA permissioned blockchain, because it restricts validation to approved members and can implement on-chain governance for upgrades.
   Reveal Solution Discussion Select an answer first
6. 25foundation · easy

   Which of the following is a typical use case for DeFi?

   • AOpening a checking account with a federally insured bank.
   • BObtaining a mortgage from a government-sponsored enterprise.
   • CPeer-to-peer lending and borrowing without a bank intermediary.
   • DTrading digital assets on a centralized exchange that holds funds in custody.
   Reveal Solution Discussion Select an answer first