Blockchain and Crypto DeFi & Smart Contracts

Question 1

What does DeFi stand for?

Accepted Answer

Decentralized Finance

Answer

Digital Finance

Answer

Distributed Finance

Answer

Decoupled Finance

Question 2

What is a liquidity pool in DeFi?

Accepted Answer

A reserve of tokens locked in a smart contract

Answer

A group of miners

Answer

A collection of wallets

Answer

A type of blockchain

Question 3

What is yield farming in DeFi?

Accepted Answer

Earning rewards by providing liquidity to protocols

Answer

Mining cryptocurrency

Answer

Staking ETH validators

Answer

Creating new governance tokens

Question 4

What is an Automated Market Maker (AMM)?

Accepted Answer

A smart contract that prices assets using a mathematical formula

Answer

A centralized exchange order book

Answer

A mining pool coordinator

Answer

A custodial wallet service

Question 5

What is 'impermanent loss' in DeFi?

Accepted Answer

Temporary value loss experienced by liquidity providers when asset prices diverge

Answer

Permanent loss of funds due to a hack

Answer

Gas fees lost during failed transactions

Answer

Price slippage on large trades

Question 6

Which blockchain is most commonly associated with DeFi applications?

Accepted Answer

Ethereum

Answer

Bitcoin

Answer

Litecoin

Answer

XRP