Integrating DeFi with FinTech Platforms BFC Practice Questions (Page 2)

Questions 6–10

1. 6application · medium

   A fintech app is adding a DeFi yield feature. The UX designer wants to show users a simple 'APY' number and a 'Deposit' button, but the compliance team insists on showing detailed risk information. The developer is concerned that too much text will confuse users. Which UX approach best balances transparency and usability?

   • AShow only the APY and require users to click a separate 'Terms' link at the bottom of the page, without any inline risk summary.
   • BShow the APY and a one-line disclaimer that says 'Crypto is risky', without further details.
   • CShow the APY prominently, but include a collapsible 'Risk Details' section that expands to show smart contract risk, impermanent loss (if applicable), and the lack of insurance.
   • DDisplay a warning modal that users must scroll through before every deposit, containing the full legal risk disclosure.
   Reveal Solution Discussion Select an answer first
2. 7foundation · easy

   In a FinTech platform integrating DeFi, what is a primary consideration when deploying smart contracts?

   • ASmart contracts are executed by a central authority, so they are not truly automated
   • BSmart contracts can be updated easily by the platform at any time
   • CSmart contracts do not require any security considerations because they run on a decentralized network
   • DSmart contracts are immutable once deployed, so thorough testing and auditing are essential before launch
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4. 8application · medium

   A fintech operating in the EU wants to integrate a DeFi lending protocol that stores user transaction data on a public blockchain. The platform must comply with GDPR. Which approach is most appropriate?

   • AAvoid storing any personal data on-chain by using pseudonymous addresses and keeping personal data off-chain in the fintech's systems.
   • BUse a public blockchain but ensure the smart contract automatically deletes user data after one year.
   • CUse a permissioned blockchain that only the fintech and its regulators can access, storing all user data there.
   • DEncrypt all on-chain data so that only the fintech can decrypt it, and treat the encrypted data as personal data.
   Reveal Solution Discussion Select an answer first
5. 9application · medium

   A fintech app is integrating a DeFi borrowing feature. Users can supply collateral and borrow stablecoins. The development team wants to make the process easy for non-technical users. Which UX feature is most important to include to ensure users understand the risks of liquidation?

   • AA one-time tutorial that explains how borrowing works, but does not show real-time data.
   • BA real-time indicator showing the current collateralization ratio and a warning when it approaches the liquidation threshold.
   • CA display of the current interest rate and the total amount owed, but not the collateralization ratio.
   • DA button that automatically adds more collateral when the ratio is low, without user confirmation.
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6. 10foundation · easy

   What is a common custody model for digital assets in a DeFi-FinTech integration?

   • ACustodial, where the platform holds users' private keys and controls the assets
   • BNon-custodial, where users retain control of their private keys and the platform does not hold the assets
   • CA model where users share their private keys with the platform for convenience
   • DA model where the blockchain network holds all private keys
   Reveal Solution Discussion Select an answer first