CCE NFTs, Tokenization, and Digital Assets 2

Question 1

What is a security token offering (STO)?

Accepted Answer

A regulated digital token offering that represents ownership in an underlying asset and is subject to securities law

Answer

STOs issue blockchain-based tokens that are classified as securities, subjecting them to SEC or equivalent regulatory oversight and offering investors legal ownership rights.

Question 2

What is the ERC-1155 token standard?

Accepted Answer

A multi-token standard that allows a single contract to manage both fungible and non-fungible tokens

Answer

ERC-1155 is a flexible Ethereum standard enabling a single smart contract to represent multiple token types (fungible, non-fungible, or semi-fungible), reducing deployment costs.

Question 3

In the context of NFTs, what is 'minting'?

Accepted Answer

The act of creating and publishing an NFT on the blockchain by recording it in a smart contract

Answer

Minting an NFT means deploying a transaction that creates a unique token record on-chain, assigning it an ID and linking it to its metadata for the first time.

Question 4

What is fractional NFT ownership?

Accepted Answer

Dividing a single NFT into multiple fungible tokens so many investors can own a share

Answer

Fractional NFT ownership protocols lock an NFT in a smart contract and issue ERC-20 tokens representing percentage shares, democratizing access to high-value NFTs.

Question 5

What is the primary difference between a utility token and a security token?

Accepted Answer

Utility tokens provide access to a product or service, while security tokens represent an investment contract with an expectation of profit

Answer

The Howey Test is used in the US to determine if a token is a security — if holders expect profits primarily from others' efforts, it is classified as a security token.

(CCE) Certified Cryptocurrency Expert Practice Test

(CCE) Certified Cryptocurrency Expert Practice Test

CCE NFTs, Tokenization, and Digital Assets 2