CCE DeFi and Decentralized Applications

Question 1

What is the primary function of a smart contract in a DeFi protocol?

Accepted Answer

To automatically execute agreement terms when predefined conditions are met

Answer

To store private keys for wallet holders

Answer

To validate blockchain node identities

Answer

To generate new cryptocurrency tokens

Question 2

In DeFi, what does TVL (Total Value Locked) measure?

Accepted Answer

The total USD value of assets deposited in a DeFi protocol

Answer

The number of users on a protocol

Answer

The transaction fees collected by a protocol

Answer

The circulating supply of a governance token

Question 3

Which mechanism allows users to earn rewards by providing liquidity to a DEX?

Accepted Answer

Liquidity mining / yield farming

Answer

Proof of Work mining

Answer

Atomic swaps

Answer

Hard forking

Question 4

What is an Automated Market Maker (AMM)?

Accepted Answer

A decentralized protocol that uses mathematical formulas to price assets in liquidity pools

Answer

A centralized exchange algorithm that matches buy and sell orders

Answer

A bot that automatically purchases cryptocurrencies at market price

Answer

A consensus mechanism for validating DeFi transactions

Question 5

What is impermanent loss in DeFi liquidity provision?

Accepted Answer

The temporary reduction in value a liquidity provider experiences compared to simply holding the tokens

Answer

A permanent loss of funds due to a smart contract hack

Answer

Gas fees consumed by failed DeFi transactions

Answer

The loss caused by slippage on large trades

Question 6

Which token standard is most commonly used for fungible tokens on the Ethereum blockchain?

Accepted Answer

ERC-20

Answer

ERC-721

Answer

ERC-1155

Answer

BEP-2