Structure and Components of the DeFi Ecosystem BFC Practice Questions (Page 6)

Questions 26–30

1. 26application · medium

   A DeFi protocol is experiencing network congestion, leading to high transaction fees and slow confirmations. The team wants to improve scalability without compromising decentralization. Which approach is most aligned with DeFi principles?

   • AMove the protocol to a permissioned blockchain controlled by a consortium.
   • BReduce the number of nodes in the network to speed up consensus.
   • CImplement a layer-2 scaling solution such as rollups that process transactions off-chain and settle on the main chain.
   • DIncrease the block size on the main chain to allow more transactions per block.
   Reveal Solution Discussion Select an answer first
2. 27application · medium

   A fintech startup is building a DeFi lending platform. They want users to supply collateral and borrow stablecoins, with interest rates determined algorithmically based on utilization. The team plans to deploy smart contracts on Ethereum. Which combination of components is essential for this platform?

   • AA decentralized exchange (DEX) smart contract, a governance token, and a stablecoin.
   • BAn oracle for price feeds, a governance token, and a decentralized exchange (DEX).
   • CA stablecoin, a blockchain explorer, and a lending protocol smart contract.
   • DA lending protocol smart contract, an oracle for price feeds, and a stablecoin as the borrowable asset.
   Reveal Solution Discussion Select an answer first
4. 28application · medium

   A DeFi protocol has been audited, but a vulnerability is discovered in a third-party integration. The team must decide how to respond. Which action best aligns with DeFi best practices?

   • AKeep the vulnerability secret to avoid panic among users.
   • BPause the affected smart contract and notify users while a fix is developed and audited.
   • CImmediately upgrade the smart contract without an audit to fix the issue quickly.
   • DIgnore the vulnerability because the audit passed.
   Reveal Solution Discussion Select an answer first
5. 29application · medium

   A financial regulator is studying DeFi to understand its role in the broader financial system. Which statement accurately describes the DeFi ecosystem's role?

   • ADeFi is a closed system that only serves accredited investors.
   • BDeFi is a single protocol that provides all financial services.
   • CDeFi provides open, permissionless access to financial services such as lending, borrowing, and trading.
   • DDeFi replaces all traditional financial institutions.
   Reveal Solution Discussion Select an answer first
6. 30foundation · easy

   Which of the following is a core component of the DeFi ecosystem?

   • ADecentralized exchange (DEX)
   • BCentral bank
   • CCredit card network
   • DCentralized exchange (CEX)
   Reveal Solution Discussion Select an answer first