Structure and Components of the DeFi Ecosystem BFC Practice Questions (Page 8)

Questions 36–40

1. 36application · medium

   A DeFi aggregator platform wants to offer users the ability to swap tokens and then automatically deposit the received tokens into a lending protocol to earn interest. The platform plans to execute both steps in a single transaction. Which characteristic of DeFi makes this possible?

   • ATokenomics, because the platform's native token incentivizes users to deposit.
   • BComposability, because smart contracts can call other smart contracts within the same transaction.
   • CScalability, because the transaction can be processed quickly on a layer-2 solution.
   • DInteroperability, because different blockchains can communicate with each other.
   Reveal Solution Discussion Select an answer first
2. 37expert · hard

   A DeFi protocol is facing a governance crisis. A large whale holds 40% of the governance tokens and is pushing for a proposal that would benefit them at the expense of smaller holders. The team wants to prevent this without alienating the whale. Which governance design is most effective?

   • AImplement a time-lock on governance proposals and require a supermajority (e.g., 70%) for high-impact changes.
   • BRemove the whale's tokens from circulation by buying them back.
   • CAllow the whale to have veto power over all proposals.
   • DSwitch to a one-token-one-vote system without any restrictions.
   Reveal Solution Discussion Select an answer first
4. 38expert · hard

   A DeFi protocol is designed to be upgradeable. The team wants to fix a bug in the smart contract but is concerned about the risk of introducing new vulnerabilities during the upgrade. They also want to maintain user trust. Which approach is most appropriate?

   • AUse a multi-sig wallet to approve the upgrade, but without any time-lock
   • BUse a proxy contract that delegates calls to a new implementation, with a time-lock and a bug bounty program
   • CDo not upgrade the contract and instead launch a new protocol, abandoning the old one
   • DFreeze the current contract and deploy a new contract, requiring users to migrate their funds
   Reveal Solution Discussion Select an answer first
5. 39foundation · easy

   Which of the following is a common security risk in DeFi protocols?

   • ALack of internet connectivity in rural areas
   • BExcessive regulation by central banks
   • CSmart contract vulnerabilities that can be exploited by attackers
   • DHigh transaction fees on centralized exchanges
   Reveal Solution Discussion Select an answer first
6. 40application · medium

   A DeFi protocol is launching a governance token. The team wants to align long-term incentives between users and the protocol. Which tokenomics design best achieves this goal?

   • AAirdrop the token to random wallet addresses to increase awareness.
   • BSell the token in a public sale to raise funds, with no voting rights attached.
   • CDistribute the token to early liquidity providers and allow them to stake tokens to vote on protocol parameters.
   • DMint a fixed supply and distribute it evenly to all users who have ever interacted with the protocol.
   Reveal Solution Discussion Select an answer first