Smart Contract Risks BFC Practice Questions (Page 6)

Questions 26–30

1. 26application · medium

   An insurance smart contract pays out automatically when a weather oracle reports a temperature above a threshold. The oracle is a single centralized service. During a heatwave, the oracle fails to update for several hours, delaying legitimate payouts. What is the most effective way to reduce this operational risk?

   • AUse multiple independent oracles and aggregate their data to determine the payout condition.
   • BIncrease the payout amount to compensate for potential delays.
   • CStore the temperature data on-chain from the start of the contract.
   • DRemove the oracle dependency and let users manually submit temperature readings.
   Reveal Solution Discussion Select an answer first
2. 27application · medium

   A DAO's treasury contract has a function that allows any member to withdraw funds. The team wants to restrict this to only elected board members. What is the best way to implement this?

   • AUse a multi-signature wallet for all transactions
   • BRely on the DAO's voting mechanism to approve each withdrawal
   • CAdd an access control modifier that checks the caller's role
   • DMake the function private so only the contract can call it
   Reveal Solution Discussion Select an answer first
4. 28expert · hard

   A team has deployed a smart contract that manages a tokenized bond. The contract is not upgradeable, and a critical bug is discovered that could allow unauthorized minting. The team must decide between deploying a new contract and migrating users, or using a proxy pattern. Which factor is most important in this decision?

   • ADeploying a new contract is always cheaper than using a proxy.
   • BThe proxy pattern is always more secure than deploying a new contract.
   • CThe proxy pattern can be applied to any contract regardless of its original design.
   • DThe proxy pattern requires the original contract to have been designed with upgradeability in mind, which is not the case here.
   Reveal Solution Discussion Select an answer first
5. 29application · medium

   A startup is creating a smart contract for peer-to-peer lending. They want to ensure the contract is legally enforceable in their country. What should they do?

   • ARely on the smart contract's self-executing nature
   • BConsult with legal experts to ensure the contract complies with local regulations
   • CUse a public blockchain to avoid legal oversight
   • DMake the contract code open-source to prove its fairness
   Reveal Solution Discussion Select an answer first
6. 30expert · hard

   A team is developing a smart contract for a new stablecoin. They have a limited budget and need to choose between a comprehensive code audit, formal verification, and a bug bounty program. Which combination offers the best risk reduction for the money?

   • AOnly conduct a code audit
   • BConduct a code audit and a bug bounty program
   • COnly run a bug bounty program
   • DOnly conduct formal verification
   Reveal Solution Discussion Select an answer first