Tokenization of Assets BFC Practice Questions (Page 7)

Questions 31–35

1. 31foundation · easy

   Which token standard is most commonly used for creating fungible tokens that represent divisible assets like commodities or securities?

   • AERC-777
   • BERC-721
   • CERC-1155
   • DERC-20
   Reveal Solution Discussion Select an answer first
2. 32application · medium

   A real estate developer wants to raise capital for a new building by selling fractional ownership to a global investor base. The developer is considering tokenization. Which benefit of tokenization is most directly aligned with this goal?

   • AGuaranteed price appreciation of the underlying asset
   • BReduced regulatory burden because tokens are not considered securities
   • CIncreased liquidity through secondary-market trading of fractional tokens
   • DElimination of the need for property management
   Reveal Solution Discussion Select an answer first
4. 33application · medium

   A company is tokenizing a portfolio of rare wines. The company wants to offer these tokens to investors in the European Union. The legal team has determined that the tokens are not securities but are considered 'crypto-assets' under the EU's Markets in Crypto-Assets Regulation (MiCA). What is the most important compliance requirement the company must address?

   • APublish a white paper and notify the relevant national authority
   • BObtain a banking license to issue the token
   • CEnsure the token is not considered a security in any EU member state
   • DRegister as a crypto-asset service provider in every EU member state
   Reveal Solution Discussion Select an answer first
5. 34foundation · easy

   How does asset tokenization enhance transparency?

   • ABy recording all transactions on a public or permissioned blockchain, creating an immutable and auditable trail of ownership
   • BBy keeping all asset information confidential and only accessible to the issuer
   • CBy using a centralized database that can be easily edited by administrators
   • DBy providing real-time physical location tracking of the asset
   Reveal Solution Discussion Select an answer first
6. 35expert · hard

   A team is tokenizing a real estate property. They have created the tokens and are now testing the smart contract. They discover that the contract allows the owner to mint unlimited tokens, which would dilute the value of existing tokens. What is the best way to mitigate this risk?

   • ASet a fixed maximum supply in the smart contract and disable the minting function after the initial issuance
   • BUse a proxy contract that can be upgraded to change the minting rules later
   • CRely on the token standard to prevent minting
   • DAllow the owner to mint tokens but require a multi-signature approval
   Reveal Solution Discussion Select an answer first