Role of DLT in Decentralized Finance (DeFi) BFC Practice Questions (Page 5)

Questions 21–25

1. 21application · medium

   A consortium of banks is evaluating DLT for cross-border payments. They require that all transactions are recorded identically across all participating nodes, and that no single bank can unilaterally alter the transaction history. Which combination of DLT characteristics is most directly relevant to these requirements?

   • AImmutability and tokenization, which ensure that transactions cannot be changed and assets are represented digitally
   • BDecentralization and consensus, which ensure that all nodes agree on the same state and no single entity controls the ledger
   • CSmart contracts and interoperability, which automate transactions and enable cross-chain communication
   • DTransparency and accessibility, which allow all banks to view and participate in the network
   Reveal Solution Discussion Select an answer first
2. 22application · medium

   A real estate company wants to allow fractional ownership of a commercial property by issuing digital tokens that represent shares of the property. Investors should be able to trade these shares on a secondary market. Which DLT capability is most directly enabling this use case?

   • ASmart contracts, which automate the payment of rental income to token holders
   • BImmutability, which guarantees that ownership records cannot be tampered with
   • CTokenization, which creates a digital representation of the property that can be divided into transferable units
   • DConsensus mechanisms, which ensure that all investors agree on the ownership records
   Reveal Solution Discussion Select an answer first
4. 23foundation · easy

   How does DLT facilitate interoperability among different DeFi protocols?

   • ABy providing a legal framework that standardizes all financial contracts.
   • BBy using a common standard for tokens and smart contracts that allows them to interact seamlessly.
   • CBy requiring all protocols to be hosted on the same centralized server.
   • DBy using a single global currency that all protocols must accept.
   Reveal Solution Discussion Select an answer first
5. 24foundation · easy

   How do dApps provide financial services in a decentralized manner?

   • ABy allowing users to interact directly with smart contracts that execute financial operations.
   • BBy requiring users to go through a licensed broker to execute trades.
   • CBy storing all financial records on a single government-controlled server.
   • DBy using a central bank to issue digital currency and settle transactions.
   Reveal Solution Discussion Select an answer first
6. 25foundation · easy

   Which statement best contrasts decentralized finance (DeFi) with traditional finance?

   • ADeFi relies on centralized intermediaries such as banks to validate transactions, while traditional finance uses peer-to-peer networks.
   • BDeFi is only available to institutional investors, while traditional finance is open to everyone.
   • CDeFi requires users to have a bank account, while traditional finance only requires an internet connection.
   • DDeFi operates on open, permissionless networks, while traditional finance typically involves trusted intermediaries and gatekeepers.
   Reveal Solution Discussion Select an answer first