A team has deployed a smart contract that manages a tokenized bond. After deployment, they discover a critical bug that could allow unauthorized minting of tokens. The contract is not upgradeable. What is the most effective mitigation strategy given the constraint?

Freeze the contract and manually process all transactions off-chain.

Rely on the community to monitor the contract and report suspicious activity.

Deploy a new contract and migrate all existing token holders to the new contract.

Use a proxy contract to redirect calls to a new implementation.

A cross-border remittance company is deploying a smart contract to automate payments. The contract will be accessible to users in multiple jurisdictions, and the company is concerned about which country's laws apply if a dispute arises. What should the company do to address this legal risk?

Make the contract immutable to prevent legal challenges

Rely on the blockchain's decentralized nature to avoid regulation

Include a choice-of-law and jurisdiction clause in the contract's terms

Deploy the contract on a private blockchain to avoid legal issues

A consortium of banks is deploying a smart contract for interbank settlements. They are concerned about the contract's inability to be updated if a bug is found after deployment. What is the best approach to address this upgradeability challenge?

Make the contract immutable to ensure trust

Use a proxy pattern that allows the contract logic to be upgraded

Deploy a new contract and migrate all data manually

Rely on the blockchain's governance to change the code

A DeFi lending protocol allows users to deposit collateral and borrow stablecoins. The smart contract updates the user's balance after transferring tokens. During a security review, an auditor warns that an attacker could repeatedly call the withdraw function before the balance is updated, draining funds. Which mitigation strategy directly addresses this vulnerability?

Use a reentrancy guard and update the user's balance before making the external token transfer.

Increase the gas limit for the withdraw function so that all operations complete in a single transaction.

Use a time lock that delays withdrawals by several blocks to give users time to react.

Rely on the blockchain's transaction ordering to ensure that only one withdrawal can occur per block.

A tokenized asset platform uses a smart contract that calculates interest based on a user's balance. A developer notices that if a user's balance is extremely large, the calculation could wrap around to a negative value. What is the best way to prevent this?

Rely on the compiler to automatically fix the issue

Use a safe math library that checks for overflow and underflow

Increase the number of decimal places in the token

Use a smaller integer type to reduce the risk

EC-CouncilBlockchain Fintech Certification

Domain 3Objective 3

Smart Contract Risks BFC Practice Questions (Page 7)

Part of the Smart Contracts in Financial Ecosystems domain, which makes up ~7% of our current practice bank.

41questions here

9free pages

5concepts

Questions 31–35

31application · medium
A team has deployed a smart contract that manages a tokenized bond. After deployment, they discover a critical bug that could allow unauthorized minting of tokens. The contract is not upgradeable. What is the most effective mitigation strategy given the constraint?
Select an answer first
32application · medium
A cross-border remittance company is deploying a smart contract to automate payments. The contract will be accessible to users in multiple jurisdictions, and the company is concerned about which country's laws apply if a dispute arises. What should the company do to address this legal risk?
Select an answer first
33application · medium
A consortium of banks is deploying a smart contract for interbank settlements. They are concerned about the contract's inability to be updated if a bug is found after deployment. What is the best approach to address this upgradeability challenge?
Select an answer first
34application · medium
A DeFi lending protocol allows users to deposit collateral and borrow stablecoins. The smart contract updates the user's balance after transferring tokens. During a security review, an auditor warns that an attacker could repeatedly call the withdraw function before the balance is updated, draining funds. Which mitigation strategy directly addresses this vulnerability?
Select an answer first
35application · medium
A tokenized asset platform uses a smart contract that calculates interest based on a user's balance. A developer notices that if a user's balance is extremely large, the calculation could wrap around to a negative value. What is the best way to prevent this?
Select an answer first

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