Blockchain Security Training DeFi Security and Audits 4

Question 1

What is the primary purpose of a timelock on DeFi governance actions?

Accepted Answer

It gives users a window to react or exit before privileged changes take effect

Answer

It speeds up proposal execution

Answer

It reduces transaction fees

Answer

It hides the proposal from voters

Question 2

A protocol with low token distribution faces what governance risk?

Accepted Answer

A whale or flash-loan attacker can pass malicious proposals

Answer

Slower block times

Answer

Higher LP fees

Answer

Frontend downtime

Question 3

During an audit, what does 'centralization risk' from an owner-only pause function indicate?

Accepted Answer

A single key can halt or alter the protocol, a single point of failure

Answer

The contract uses too much storage

Answer

Events are not emitted

Answer

Gas costs are too high

Question 4

What is the benefit of using a multisig wallet for protocol admin keys?

Accepted Answer

It requires multiple parties to approve privileged actions, reducing single-key risk

Answer

It eliminates gas fees

Answer

It makes the contract immutable

Answer

It prevents all reentrancy

Question 5

What is a key purpose of a bug bounty program for a DeFi protocol?

Accepted Answer

Incentivizing white-hat researchers to disclose vulnerabilities responsibly

Answer

Replacing the need for any code audit

Answer

Speeding up block production

Answer

Lowering staking requirements

Question 6

Why should an audit verify that ERC-20 'transfer' return values are checked?

Accepted Answer

Some tokens return false instead of reverting on failure, causing silent failures

Answer

It reduces contract size

Answer

It is required for proxy upgrades

Answer

It prevents overflow

Question 7

What is the risk of 'fee-on-transfer' tokens in a DeFi pool?

Accepted Answer

The amount received differs from the amount sent, breaking accounting assumptions

Answer

They cannot be approved

Answer

They increase block size

Answer

They disable events