Role of DLT in Decentralized Finance (DeFi) BFC Practice Questions (Page 8)

Questions 36–40

1. 36foundation · easy

   How does DLT serve as the foundational infrastructure for DeFi?

   • AIt replaces the need for the internet by using a separate peer-to-peer network for all communications.
   • BIt acts as a legal framework that automatically enforces government regulations on all financial transactions.
   • CIt provides a centralized database for financial institutions to share customer data.
   • DIt enables the creation of smart contracts and tokenized assets that operate on a decentralized network.
   Reveal Solution Discussion Select an answer first
2. 37foundation · easy

   What is the primary role of a consensus mechanism in a DeFi blockchain?

   • ATo create new tokens automatically for every user who joins the network.
   • BTo ensure that all nodes agree on the validity and order of transactions.
   • CTo provide a user interface for managing digital wallets.
   • DTo encrypt all transactions so only the sender and receiver can read them.
   Reveal Solution Discussion Select an answer first
4. 38foundation · easy

   Which of the following is a common risk associated with using DLT in DeFi?

   • AThe requirement for all transactions to be approved by a central bank.
   • BThe lack of any regulatory oversight, which eliminates all legal risks.
   • CThe inability to transfer assets between users.
   • DSmart contract vulnerabilities that can be exploited by attackers.
   Reveal Solution Discussion Select an answer first
5. 39application · medium

   A team is designing a decentralized insurance dApp that automatically pays claims when predefined conditions are met. Which DLT component is essential for the dApp to determine whether a claim condition has been met?

   • AAn oracle that supplies external data to the smart contract
   • BA token standard that defines the claim's value
   • CA sidechain that isolates the insurance logic from the main chain
   • DA consensus mechanism that validates the claim transaction
   Reveal Solution Discussion Select an answer first
6. 40application · medium

   A fintech startup wants to offer tokenized real-estate shares to retail investors. They plan to use a public DLT platform with smart contracts to automate dividend distributions and secondary trading. Which combination of DLT capabilities is most directly enabling this use case?

   • ASmart contracts for automated execution and tokenization for fractional ownership
   • BImmutability and consensus mechanisms that prevent double-spending of tokens
   • CDecentralization and interoperability with traditional banking systems
   • DConsensus mechanisms and smart contracts for regulatory compliance reporting
   Reveal Solution Discussion Select an answer first