DeFi and Tokenomics 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 DeFi and Tokenomics flashcards as text
What is a token's 'total supply' in tokenomics?
Answer: The maximum number of tokens that will ever exist
Total supply refers to the maximum number of tokens that will ever be created according to the protocol's rules, setting a hard cap on issuance.
What does 'TVL' measure in DeFi?
Answer: Total Value Locked in smart contracts
TVL (Total Value Locked) measures the total dollar value of assets deposited and locked within a DeFi protocol's smart contracts.
What is a 'flash loan' in DeFi?
Answer: An uncollateralized loan that must be borrowed and repaid within the same transaction
Flash loans are uncollateralized DeFi loans that must be borrowed and repaid within a single blockchain transaction, or the entire transaction reverts.
Which of the following is an example of an algorithmic stablecoin?
Answer: TerraUSD (UST)
TerraUSD (UST) was an algorithmic stablecoin that maintained its peg through an algorithmic relationship with the LUNA token rather than fiat reserves.
In tokenomics, what is 'vesting'?
Answer: A schedule that releases tokens to team members or investors gradually over time
Vesting is a time-based release schedule for tokens allocated to team members, investors, or advisors, preventing immediate sell-off after a project launches.
What is the role of a 'liquidity provider' (LP) in an AMM-based DEX?
Answer: To deposit token pairs into a pool and earn a share of trading fees
Liquidity providers deposit equal values of two tokens into a pool, enabling traders to swap between them, and earn a proportional share of the trading fees generated.
What is 'slippage' in DeFi trading?
Answer: The difference between the expected price and the actual execution price of a trade
Slippage is the difference between the expected price of a trade and the actual price at execution, often caused by low liquidity or large trade sizes moving the pool's price.