Risk Management in Blockchain Finance BFC Practice Questions (Page 4)

Questions 16–20

1. 16application · medium

   A decentralized autonomous organization (DAO) manages a large treasury of stablecoins. The DAO has a governance token that allows members to vote on proposals. A proposal to change the treasury's investment strategy is passed with a narrow majority. Some members suspect the vote was manipulated by a whale who bought a large number of tokens just before the vote. What governance control would best reduce the risk of such manipulation in future votes?

   • AImplement a time-locked voting system that requires tokens to be held for a minimum period before they can vote.
   • BUse a multi-signature wallet for the treasury.
   • CIncrease the quorum requirement for all proposals.
   • DAllow the founding team to veto any proposal they disagree with.
   Reveal Solution Discussion Select an answer first
2. 17foundation · easy

   Which risk assessment approach categorizes risks using descriptive scales such as 'high', 'medium', or 'low' based on expert judgment?

   • AQuantitative risk assessment
   • BValue at Risk (VaR)
   • CQualitative risk assessment
   • DMonte Carlo simulation
   Reveal Solution Discussion Select an answer first
4. 18application · medium

   A decentralized autonomous organization (DAO) manages a large treasury. The DAO wants to establish a risk monitoring and reporting mechanism. Which approach would provide the MOST effective early warning for potential governance attacks?

   • AMonitor the concentration of voting power and the frequency of large token transfers.
   • BReview the DAO's smart contract code once a year.
   • CRely on community members to report suspicious activity on social media.
   • DTrack the price of the DAO's governance token on exchanges.
   Reveal Solution Discussion Select an answer first
5. 19expert · hard

   A blockchain payment company has a business continuity plan that relies on a backup node in a different cloud region. During a regional outage, the backup node fails to sync because the backup was not tested recently. What is the most important lesson from this incident?

   • AThe backup node should be in the same region as the primary node.
   • BThe company should use a single cloud provider to avoid compatibility issues.
   • CBusiness continuity plans must be regularly tested, including failover and recovery procedures.
   • DThe company should rely on manual recovery procedures instead of automated ones.
   Reveal Solution Discussion Select an answer first
6. 20application · medium

   A blockchain-based identity verification service stores personal data on-chain. They are subject to GDPR and need to comply with the 'right to be forgotten'. Which approach would BEST address this requirement?

   • AUse a private blockchain that is not accessible to the public.
   • BEncrypt the personal data on-chain and keep the encryption key safe.
   • CStore personal data on-chain but allow users to request deletion by sending a special transaction.
   • DStore personal data off-chain and only store a hash or reference on-chain.
   Reveal Solution Discussion Select an answer first