Role of DLT in Decentralized Finance (DeFi) BFC Practice Questions (Page 2)

Questions 6–10

1. 6application · medium

   A consortium of banks is evaluating a permissioned DLT for cross-border payments. They require that only approved banks can validate transactions and that transaction records cannot be altered once confirmed. Which two DLT characteristics are they prioritizing?

   • APermissioned access and immutability
   • BDecentralization and tokenization
   • CConsensus and smart contracts
   • DInteroperability and composability
   Reveal Solution Discussion Select an answer first
2. 7foundation · easy

   In a proof-of-stake (PoS) consensus mechanism, what determines a validator's ability to create a new block?

   • AThe number of tokens the validator has staked as collateral.
   • BThe validator's geographic location and internet speed.
   • CThe amount of computational power the validator contributes to solving complex puzzles.
   • DThe validator's history of successful transactions in traditional banking.
   Reveal Solution Discussion Select an answer first
4. 8application · medium

   A group of insurance companies wants to automate claim payouts for flight delay insurance. The system should automatically trigger a payment to the insured when a flight is delayed beyond a threshold, without manual claims processing. Which DLT component is most essential for this automation?

   • ATokenization of insurance policies to represent them as digital assets
   • BA decentralized autonomous organization (DAO) to govern the insurance pool and approve claims
   • CSmart contracts that execute predefined logic when conditions are met, such as receiving flight status data from an oracle
   • DA proof-of-stake consensus mechanism to validate the flight delay data
   Reveal Solution Discussion Select an answer first
5. 9foundation · easy

   Which feature of DLT is most directly responsible for enabling the creation of DeFi applications?

   • AThe ability to execute programmable logic through smart contracts.
   • BThe use of a central administrator to approve all code changes.
   • CThe requirement that all transactions be reviewed by a regulatory body before execution.
   • DThe ability to store large files directly on the ledger, such as entire financial contracts.
   Reveal Solution Discussion Select an answer first
6. 10foundation · easy

   What is a decentralized application (dApp) in the context of DeFi?

   • AAn application that runs on a centralized server but uses blockchain for data storage.
   • BAn application whose backend code runs on a distributed ledger, typically using smart contracts.
   • CAn application that is distributed through app stores without any central review.
   • DAn application that uses peer-to-peer file sharing to store user data on multiple computers.
   Reveal Solution Discussion Select an answer first