CCE Initial Coin Offerings (ICOs) 3

Question 1

What is a 'SAFT' (Simple Agreement for Future Tokens) and why was it developed?

Accepted Answer

A legal framework allowing accredited investors to fund token projects before network launch while deferring token delivery

Answer

The SAFT is an investment contract sold only to accredited investors, with actual tokens delivered later when the network is functional and tokens may qualify as utilities.

Question 2

Which country was among the first to completely ban ICOs in September 2017?

Accepted Answer

China

Answer

China banned ICOs in September 2017, calling them illegal fundraising and requiring all ICO proceeds to be refunded.

Question 3

In token economics, what is a 'token burn' mechanism and how does it benefit holders?

Accepted Answer

Permanently destroying a portion of tokens to reduce supply, potentially increasing scarcity and value

Answer

Token burns permanently remove tokens from circulation, reducing total supply which can create deflationary pressure and potentially increase each remaining token's value.

Question 4

What is 'bounty campaign' in the context of an ICO?

Accepted Answer

A reward program offering tokens to community members for completing tasks like promotion, bug reporting, or content creation

Answer

ICO bounty campaigns distribute tokens as compensation for community contributions such as social media promotion, translation, bug discovery, or content creation.

Question 5

What is the primary difference between a 'public sale' and a 'private sale' in a typical ICO structure?

Accepted Answer

Private sales offer tokens at a discount to select investors before the public round opens

Answer

Private (or pre-sale) rounds offer discounted tokens to institutional investors and large contributors before the main public token sale begins.

(CCE) Certified Cryptocurrency Expert Practice Test

(CCE) Certified Cryptocurrency Expert Practice Test

CCE Initial Coin Offerings (ICOs) 3