CCI Smart Contracts and DeFi Investigations 1 — Questions and Answers
Question 1: What is a smart contract in the context of blockchain technology?
- A legal document stored on a blockchain
- Self-executing code deployed on a blockchain that automatically enforces agreement terms (Correct answer)
- A cryptocurrency exchange service agreement
- A digital signature on a financial contract
Correct answer: Self-executing code deployed on a blockchain that automatically enforces agreement terms
Smart contracts are self-executing programs stored on a blockchain that automatically enforce and execute the terms of an agreement when predetermined conditions are met.
Question 2: Which blockchain platform is most commonly associated with smart contract functionality central to DeFi investigations?
- Bitcoin
- Litecoin
- Ethereum (Correct answer)
- Dogecoin
Correct answer: Ethereum
Ethereum pioneered smart contract functionality and remains the dominant platform for DeFi applications, making it central to most DeFi investigations.
Question 3: What does the ERC-20 standard define in the Ethereum ecosystem?
- A standard for non-fungible tokens
- A protocol for cross-chain transfers
- A technical standard for fungible tokens on Ethereum (Correct answer)
- Ethereum's consensus algorithm
Correct answer: A technical standard for fungible tokens on Ethereum
ERC-20 defines a common standard for fungible tokens on the Ethereum blockchain, enabling interoperability between tokens and decentralized applications.
Question 4: In DeFi, what does TVL (Total Value Locked) measure?
- The total number of transactions on a DeFi platform
- The total value of assets deposited in a DeFi protocol's smart contracts (Correct answer)
- The total trading volume in a 24-hour period
- The total number of token holders
Correct answer: The total value of assets deposited in a DeFi protocol's smart contracts
TVL represents the total value of cryptocurrency assets deposited and locked within a DeFi protocol's smart contracts, indicating the protocol's size and adoption.
Question 5: What is a 'rug pull' in the context of DeFi fraud?
- A technical exploit that drains smart contract funds via code vulnerability
- A market manipulation tactic using wash trading to inflate volume
- When developers abandon a project and abscond with investor funds (Correct answer)
- A type of front-running attack on DEX transactions
Correct answer: When developers abandon a project and abscond with investor funds
A rug pull occurs when cryptocurrency developers abandon a project and abscond with investor funds, typically after creating artificial hype and attracting liquidity.
Question 6: What is a flash loan attack in DeFi?
- A rapid brute-force attack on private keys
- An exploit using uncollateralized loans taken and repaid within a single transaction to manipulate protocols (Correct answer)
- A phishing attack targeting DeFi wallet users
- A distributed denial-of-service attack on blockchain nodes
Correct answer: An exploit using uncollateralized loans taken and repaid within a single transaction to manipulate protocols
Flash loan attacks exploit uncollateralized loans that must be borrowed and repaid within a single blockchain transaction, enabling attackers to manipulate prices or drain liquidity pools without upfront capital.
Question 7: Which tool is commonly used by investigators to analyze Ethereum smart contract source code, transactions, and token transfers?
- Wireshark
- Etherscan (Correct answer)
- Nessus
- Splunk
Correct answer: Etherscan
Etherscan is the primary blockchain explorer for Ethereum, allowing investigators to view verified smart contract source code, transaction histories, token transfers, and contract interactions.
CCI Smart Contracts and DeFi Investigations 1
What is a smart contract in the context of blockchain technology?