CCI Smart Contracts and DeFi Investigations 3

Question 1

What does MEV (Maximal Extractable Value) refer to in blockchain?

Accepted Answer

Profit extracted by validators by reordering, inserting, or censoring transactions within blocks

Answer

MEV refers to the maximum value that can be extracted from block production by including, excluding, or reordering transactions within blocks, often at the expense of regular users.

Question 2

What is a blockchain bridge and why is it significant for cryptocurrency investigations?

Accepted Answer

A protocol enabling asset transfers between different blockchains, creating cross-chain tracing gaps

Answer

Blockchain bridges enable asset transfers between different blockchain networks, creating investigative challenges because funds effectively disappear on one chain and reappear on another with a different transaction history.

Question 3

In blockchain, what is an oracle and what risk does it pose for DeFi protocols?

Accepted Answer

A service that provides external real-world data to smart contracts, which can be manipulated

Answer

Blockchain oracles are third-party services that supply external data to smart contracts; oracle manipulation attacks occur when adversaries corrupt the data feed to exploit the smart contracts that rely on it for decision-making.

Question 4

What is a DAO (Decentralized Autonomous Organization) and how can it be relevant to cryptocurrency investigations?

Accepted Answer

An organization governed by smart contracts and token-holder votes, which can be exploited for financial crimes

Answer

A DAO is an entity encoded in smart contracts where decisions are made by token holders; DAOs have been involved in investigations involving treasury manipulation, governance attacks, and using governance votes to legitimize fund movements.

Question 5

What is front-running in the context of DeFi transactions?

Accepted Answer

Inserting a transaction ahead of a known pending transaction by paying higher gas fees to profit from anticipated price impact

Answer

Front-running in DeFi involves placing a transaction ahead of a known pending transaction by paying higher gas fees, allowing the attacker to profit from the price movement caused by the victim's larger transaction.

CCI - Certified Cryptocurrency Investigator Practice Test

CCI - Certified Cryptocurrency Investigator Practice Test

CCI Smart Contracts and DeFi Investigations 3