Structure and Components of the DeFi Ecosystem BFC Practice Questions (Page 5)

Questions 21–25

1. 21application · medium

   A DeFi platform wants to allow users to use their liquidity provider (LP) tokens from a DEX as collateral in a lending protocol. Which DeFi concept enables this integration?

   • AInteroperability, because the DEX and lending protocol are on different blockchains.
   • BComposability, because the lending protocol can recognize and accept LP tokens as collateral.
   • CTokenomics, because LP tokens have a specific economic value.
   • DStablecoin pegging, because LP tokens are pegged to a stable asset.
   Reveal Solution Discussion Select an answer first
2. 22application · medium

   A DeFi aggregator routes user trades across multiple DEXs to get the best price. A user reports that a transaction failed and the gas fee was still charged. What is the most likely cause and how should the aggregator address it?

   • AThe user's wallet did not have enough tokens, and the aggregator should require a higher gas limit
   • BThe DEX's smart contract was malicious and stole the gas fee, so the aggregator should blacklist that DEX
   • CThe transaction reverted due to slippage or insufficient liquidity, and the aggregator should implement better slippage protection and quote validation
   • DThe aggregator used an outdated oracle, and the aggregator should switch to a centralized price feed
   Reveal Solution Discussion Select an answer first
4. 23application · medium

   A DeFi developer is building a yield aggregator that automatically moves user funds between lending protocols to maximize interest. The aggregator must interact with multiple protocols that use different token standards. Which approach is essential for the aggregator to work?

   • AUsing a centralized server to manually move funds between protocols
   • BUsing a custom token standard that is unique to the aggregator
   • CUsing smart contracts that are compatible with the ERC-20 standard and can call functions on other protocols
   • DUsing a single protocol that supports all yield strategies natively
   Reveal Solution Discussion Select an answer first
5. 24application · medium

   A DeFi protocol's governance token is used for voting on protocol parameters. A large investor acquires a significant portion of the token supply and proposes a change that would benefit them at the expense of other users. What is the primary risk, and what is a common mitigation?

   • AFlash loan attack on the token price; mitigation is to use a decentralized oracle
   • BRegulatory risk from the token being classified as a security; mitigation is to restrict trading to accredited investors
   • CSmart contract bug in the governance module; mitigation is to conduct a security audit
   • DGovernance attack via concentration of voting power; mitigation is to implement voting power caps or delegation limits
   Reveal Solution Discussion Select an answer first
6. 25application · medium

   A DeFi protocol has a critical vulnerability in its smart contract. The team wants to mitigate the risk while maintaining decentralization. Which approach is most appropriate?

   • AImplement a time-lock and a governance process that allows the community to vote on an emergency upgrade
   • BImmediately pause the contract using a centralized admin key controlled by the team
   • CFork the protocol and migrate all users to a new contract without any governance approval
   • DDo nothing and rely on the community to detect and report the vulnerability
   Reveal Solution Discussion Select an answer first