Blockchain Security Training Risk Mitigation 3 — Questions and Answers
Question 1: Which strategy best mitigates the risk of a hot wallet being drained on an exchange?
- Keeping the majority of funds in cold storage and only operational amounts hot (Correct answer)
- Storing all customer funds in one internet-connected wallet
- Disabling withdrawal monitoring
- Reusing the same address for every deposit
Correct answer: Keeping the majority of funds in cold storage and only operational amounts hot
Cold storage keeps the bulk of funds offline and out of reach of online attackers.
Question 2: A smart contract uses external calls. Which pattern mitigates reentrancy risk?
- Checks-Effects-Interactions ordering with a reentrancy guard (Correct answer)
- Making the external call before updating state
- Removing all require statements
- Allowing unlimited recursive calls
Correct answer: Checks-Effects-Interactions ordering with a reentrancy guard
Updating state before external calls and using a guard prevents reentrant withdrawals.
Question 3: What is the main risk-mitigation benefit of formal verification for a critical contract?
- It mathematically proves the code meets specified properties (Correct answer)
- It guarantees the token price will rise
- It replaces the need for access control
- It eliminates all gas costs
Correct answer: It mathematically proves the code meets specified properties
Formal verification proves specified properties hold for all inputs, catching subtle logic flaws.
Question 4: Which measure best mitigates governance-token attack risk where an attacker borrows tokens to pass a malicious proposal?
- Requiring a voting delay and snapshot before flash-loaned votes can count (Correct answer)
- Allowing instant voting with borrowed tokens
- Lowering the quorum to zero
- Removing proposal review periods
Correct answer: Requiring a voting delay and snapshot before flash-loaned votes can count
Snapshots and voting delays prevent flash-loaned tokens from being used to vote.
Question 5: How does a phased or canary deployment mitigate risk for a new protocol version?
- It exposes a small portion of users/funds first to limit blast radius (Correct answer)
- It deploys to all users instantly with no monitoring
- It removes the ability to roll back
- It bypasses audits entirely
Correct answer: It exposes a small portion of users/funds first to limit blast radius
Limiting initial exposure contains damage if the new version has a flaw.
Question 6: Which control mitigates the risk of a malicious or buggy dependency in a contract's imported libraries?
- Pinning audited library versions and reviewing all dependencies (Correct answer)
- Always importing the latest unaudited version automatically
- Copying random code from forums
- Ignoring transitive dependencies
Correct answer: Pinning audited library versions and reviewing all dependencies
Pinning and reviewing dependencies prevents supply-chain risks from unvetted code.
Question 7: What is the primary mitigation against private keys being stolen from a developer's machine?
- Using a hardware security module or hardware wallet for signing (Correct answer)
- Keeping keys in plaintext config files
- Committing keys to the Git repository
- Emailing keys to teammates
Correct answer: Using a hardware security module or hardware wallet for signing
Hardware signing devices keep keys off the host and resist software-based theft.
Blockchain Security Training Risk Mitigation 3
Which strategy best mitigates the risk of a hot wallet being drained on an exchange?