Smart Contract Applications Across FinTech BFC Practice Questions (Page 1)

Questions 1–5

1. 1application · medium

   A government agency is reviewing a pilot project that uses smart contracts for welfare payments. The pilot aims to reduce fraud and ensure timely disbursement. Which outcome would best demonstrate the success of the pilot?

   • AAn increase in the number of smart contracts deployed on the network.
   • BA higher transaction fee per payment compared to the legacy system.
   • CA measurable reduction in payment processing time and a decrease in fraudulent claims.
   • DThe ability for recipients to mine new tokens as a reward.
   Reveal Solution Discussion Select an answer first
2. 2foundation · easy

   How can a smart contract be designed to incorporate KYC/AML checks?

   • ABy requiring a verified credential from a trusted identity provider before executing certain functions
   • BBy using a random number generator to approve transactions
   • CBy allowing anyone to execute the contract without any identity verification
   • DBy storing all personal data directly on the blockchain in plain text
   Reveal Solution Discussion Select an answer first
4. 3expert · hard

   A smart contract for automated insurance payouts has been live for six months. A bug is discovered that could allow a user to claim multiple payouts for the same event. The contract has no upgrade mechanism. The team must decide how to respond. Which action is most appropriate?

   • ADeploy a new version of the contract and migrate all active policies to it, while pausing the old contract if possible.
   • BTry to modify the existing contract's code directly on the blockchain.
   • CDo nothing because the contract is immutable and cannot be changed.
   • DRely on the community to report the bug and hope that no one exploits it.
   Reveal Solution Discussion Select an answer first
5. 4application · medium

   A cross-border payment platform uses smart contracts to settle transactions. Regulators require that all transactions above a certain threshold be reported automatically. How can the smart contract be designed to meet this requirement?

   • AInclude logic that triggers a reporting event to a regulatory authority when the transaction amount exceeds the threshold.
   • BRequire users to manually report their own transactions above the threshold.
   • CStore all transaction data on-chain and rely on regulators to monitor the blockchain themselves.
   • DLimit all transactions to amounts below the threshold to avoid reporting obligations.
   Reveal Solution Discussion Select an answer first
6. 5application · medium

   A startup wants to create a platform for trading fractional ownership of fine art. Each artwork is unique, and investors want to buy and sell small shares. The startup also wants to automate dividend payments from art sales. Which smart contract approach is most suitable?

   • ACreate a single non-fungible token (NFT) for each artwork and require manual transfer of ownership shares.
   • BUse a centralized database to track ownership and a separate smart contract for dividends.
   • CCreate a smart contract that issues fungible tokens for each artwork, representing fractional ownership, and automates dividend distribution to token holders.
   • DUse a smart contract that only records ownership on-chain but does not handle dividend payments.
   Reveal Solution Discussion Select an answer first