CBCP Cryptocurrency and Digital Assets 3

Question 1

What is 'DeFi yield farming'?

Accepted Answer

Providing liquidity or staking assets in DeFi protocols to earn rewards and interest

Answer

Yield farming involves strategically deploying crypto assets across DeFi protocols to maximize returns through interest, fees, and governance token rewards.

Question 2

Which attack vector exploits the order of transactions within a block for profit?

Accepted Answer

Maximal Extractable Value (MEV)

Answer

MEV refers to the maximum value extractable by miners/validators by reordering, inserting, or censoring transactions within blocks they produce.

Question 3

What is the 'Lightning Network' designed to solve for Bitcoin?

Accepted Answer

Scalability by enabling off-chain payment channels that settle on Bitcoin's base layer

Answer

The Lightning Network creates bidirectional payment channels off-chain, enabling fast and cheap Bitcoin microtransactions that settle on-chain only when channels close.

Question 4

How does an 'Automated Market Maker' (AMM) determine token prices?

Accepted Answer

Using a mathematical formula based on the ratio of token reserves in a liquidity pool

Answer

AMMs use algorithmic pricing formulas (e.g., x*y=k) that adjust prices automatically based on the ratio of assets held in the liquidity pool.

Question 5

What is a 'crypto dusting attack'?

Accepted Answer

Sending tiny amounts of cryptocurrency to wallets to de-anonymize owners by tracking subsequent transactions

Answer

Dusting attacks send tiny 'dust' amounts to many wallets; if recipients move those funds, analysts can cluster and link addresses to reveal wallet ownership.

CBCP - Certified Blockchain Professional Practice Test

CBCP - Certified Blockchain Professional Practice Test

CBCP Cryptocurrency and Digital Assets 3