A DeFi protocol uses a single centralized exchange's price feed as its oracle. A flash loan attack temporarily manipulates the price on that exchange. What is the most effective way to mitigate this vulnerability?

Use a time-weighted average price (TWAP) oracle that aggregates data from multiple sources

Require users to complete KYC before borrowing

Use the exchange's order book depth as the price source

Increase the protocol's fees to deter attackers

How do liquidity providers earn fees in a typical AMM liquidity pool?

They receive a portion of the trading fees generated by every swap in the pool, proportional to their share.

They earn interest from borrowers who take out loans against the pool's assets.

They earn rewards by validating transactions on the underlying blockchain.

They receive a fixed annual percentage yield paid by the protocol treasury.

EC-CouncilBlockchain Fintech Certification

Domain 4Objective 4

Core Protocols and Liquidity Mechanisms in DeFi BFC Practice Questions (Page 11)

Part of the Decentralized Finance (DeFi) in Financial Services domain, which makes up ~15% of our current practice bank.

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Questions 51–52

51application · medium
A DeFi protocol uses a single centralized exchange's price feed as its oracle. A flash loan attack temporarily manipulates the price on that exchange. What is the most effective way to mitigate this vulnerability?
Select an answer first
52foundation · easy
How do liquidity providers earn fees in a typical AMM liquidity pool?
Select an answer first

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Core Protocols and Liquidity Mechanisms in DeFi BFC Practice Questions (Page 11)

Questions 51–52

A DeFi protocol uses a single centralized exchange's price feed as its oracle. A flash loan attack temporarily manipulates the price on that exchange. What is the most effective way to mitigate this vulnerability?

How do liquidity providers earn fees in a typical AMM liquidity pool?

Keep studying — Decentralized Finance (DeFi) in Financial Services