CBCP Cryptocurrency and Digital Assets 4

Question 1

What is an 'Initial DEX Offering' (IDO)?

Accepted Answer

A fundraising method where new tokens are sold and listed directly on a decentralized exchange

Answer

An IDO is a token launch on a DEX launchpad, providing immediate liquidity and trading without the gatekeeping of centralized exchanges.

Question 2

What is 'impermanent loss' in DeFi liquidity provision?

Accepted Answer

The temporary reduction in value a liquidity provider experiences compared to simply holding the assets, caused by price divergence

Answer

Impermanent loss occurs when the price ratio of pooled assets changes from deposit time; the loss becomes permanent only if the LP withdraws before prices revert.

Question 3

Which regulatory framework primarily governs cryptocurrency exchanges operating in the United States?

Accepted Answer

A combination of FinCEN (MSB registration), SEC (securities), and CFTC (derivatives) oversight

Answer

US crypto exchanges face a patchwork: FinCEN requires MSB registration with AML/KYC, the SEC regulates security tokens, and the CFTC oversees crypto derivatives.

Question 4

What is a 'wrapped token' such as Wrapped Bitcoin (WBTC)?

Accepted Answer

A token pegged to another cryptocurrency's value, issued on a different blockchain to enable cross-chain use

Answer

Wrapped tokens are pegged 1:1 to another asset, held in custody, and minted on a target blockchain to bring that asset's value into a different ecosystem (e.g., WBTC brings BTC into Ethereum's DeFi).

Question 5

What is the 'halving' event in Bitcoin's protocol?

Accepted Answer

A scheduled event approximately every four years that cuts the block subsidy reward to miners in half

Answer

Bitcoin's halving occurs every 210,000 blocks (~4 years), reducing the block reward by 50% to enforce its disinflationary supply schedule toward the 21 million cap.

CBCP - Certified Blockchain Professional Practice Test

CBCP - Certified Blockchain Professional Practice Test

CBCP Cryptocurrency and Digital Assets 4