CCE NFTs, Tokenization, and Digital Assets 4

Question 1

What is the primary legal challenge when an NFT represents ownership of a physical asset like real estate?

Accepted Answer

On-chain ownership must still be reconciled with off-chain legal title systems

Answer

NFTs representing physical assets face a bridging problem: blockchain ownership records are not automatically recognized by traditional legal title systems, requiring off-chain legal agreements.

Question 2

Which ERC standard introduced a semi-fungible token that can behave as both fungible and non-fungible depending on context?

Accepted Answer

ERC-1155

Answer

ERC-1155 is a multi-token standard that supports both fungible and non-fungible tokens within a single contract, enabling batch transfers and hybrid asset types.

Question 3

A collector purchases an NFT of a digital artwork. What does the collector typically NOT receive by default?

Accepted Answer

Copyright or intellectual property rights to the underlying artwork

Answer

NFT ownership transfers the token itself but not the underlying copyright unless explicitly assigned in a separate legal agreement.

Question 4

In the context of real-world asset (RWA) tokenization, what does 'fractionalization' primarily enable?

Accepted Answer

Dividing ownership of a high-value asset into smaller, tradeable units

Answer

Fractionalization allows a single high-value asset, such as commercial real estate or fine art, to be divided into many tokens so more investors can participate.

Question 5

What is 'NFT wash trading' and why is it a concern?

Accepted Answer

Buying and selling an NFT between related wallets to artificially inflate its price history

Answer

Wash trading involves coordinated self-dealing transactions to create a false appearance of demand and price appreciation, misleading genuine buyers.

(CCE) Certified Cryptocurrency Expert Practice Test

(CCE) Certified Cryptocurrency Expert Practice Test

CCE NFTs, Tokenization, and Digital Assets 4