Crypto Jobs Blockchain Fundamentals 5

Question 1

What is a token standard like ERC-20 primarily used for?

Accepted Answer

Defining a common interface for fungible tokens on Ethereum

Answer

ERC-20 specifies a standard interface so fungible tokens behave consistently across wallets and contracts.

Question 2

How does an NFT differ from a fungible token?

Accepted Answer

Each NFT is unique and not interchangeable one-for-one

Answer

Non-fungible tokens represent unique assets, unlike fungible tokens where each unit is identical and interchangeable.

Question 3

What is a Layer 2 scaling solution?

Accepted Answer

A protocol built atop a base chain to increase throughput and reduce costs

Answer

Layer 2 solutions process transactions off the main chain and settle results back to it, improving scalability.

Question 4

What is the main idea behind decentralized finance (DeFi)?

Accepted Answer

Recreating financial services using smart contracts without intermediaries

Answer

DeFi uses smart contracts to offer lending, trading, and other services without traditional intermediaries.

Question 5

What is a stablecoin designed to do?

Accepted Answer

Maintain a stable value, often pegged to a fiat currency

Answer

Stablecoins aim to hold a steady value, typically by pegging to assets like the US dollar.

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