Ethereum Token Standards and DeFi Flashcards
6 cards from real Ethereum Developer practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Ethereum Token Standards and DeFi flashcards as text
What is yield farming in DeFi?
Answer: Maximizing returns by strategically deploying assets across lending and liquidity protocols
Yield farming involves actively moving funds between DeFi protocols to maximize interest, fees, and token rewards.
What is the role of an oracle in a DeFi smart contract?
Answer: To provide off-chain real-world data (like prices) to smart contracts on-chain
Oracles bridge the gap between on-chain contracts and off-chain data sources, supplying information like asset prices.
What is a reentrancy attack in the context of DeFi smart contracts?
Answer: An exploit where a malicious contract repeatedly calls back into a vulnerable contract before state is updated
A reentrancy attack exploits a contract that sends ETH before updating its internal balance, allowing the attacker to drain funds recursively.
What does the Checks-Effects-Interactions (CEI) pattern prevent in Solidity?
Answer: Reentrancy attacks by updating state before making external calls
The CEI pattern mandates checking conditions, updating state, then interacting with external contracts to prevent reentrancy exploits.
What is slippage in the context of DEX trading?
Answer: The difference between the expected price and the executed price of a trade
Slippage occurs because large trades move the pool's price, causing the execution price to differ from the quoted price.
What is a stablecoin in the Ethereum ecosystem?
Answer: A token designed to maintain a stable value, usually pegged to a fiat currency like USD
Stablecoins reduce volatility by pegging their value to a reference asset, enabling predictable DeFi participation and payments.