Risk Mitigation Flashcards
7 cards from real Blockchain Technology practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Mitigation flashcards as text
Which control most directly reduces the risk of a single compromised key draining a treasury wallet?
Answer: Multi-signature (multisig) wallet requiring multiple approvers
Multisig spreads signing authority so no single compromised key can move funds alone.
A protocol wants to limit losses if an exploit is discovered after deployment. Which mechanism best mitigates this risk?
Answer: A pausable/circuit-breaker function controlled by a guardian
A circuit breaker lets defenders halt vulnerable functions before more funds are lost.
What is the primary risk-mitigation purpose of a timelock on protocol governance actions?
Answer: It gives users time to react or exit before a change takes effect
A timelock delays execution, giving the community a window to detect and respond to malicious changes.
Which practice best mitigates oracle manipulation risk in a DeFi lending protocol?
Answer: Using a time-weighted average price (TWAP) from multiple sources
TWAP across multiple liquid sources makes price manipulation far more expensive.
A team holds an admin upgrade key. What mitigation reduces insider and single-point-of-failure risk for that key?
Answer: Placing the key behind a multisig with a timelock
A multisig plus timelock removes single-person control and delays any malicious upgrade.
Which approach most effectively mitigates the risk of unknown vulnerabilities reaching production code?
Answer: Independent third-party security audits plus a bug bounty program
External audits and bug bounties surface flaws that internal teams often miss.
What does setting per-transaction and daily withdrawal limits on a bridge primarily mitigate?
Answer: The size of losses during an active exploit
Rate limits cap how much can be drained before defenders intervene.