DeFi and Tokenomics Flashcards
7 cards from real Blockchain Technology practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 DeFi and Tokenomics flashcards as text
What is a 'DEX' in DeFi?
Answer: A decentralized exchange that allows peer-to-peer trading without intermediaries
A DEX (Decentralized Exchange) is a platform that enables peer-to-peer cryptocurrency trading directly from users' wallets without a centralized custodian.
What is 'token burning' and why do protocols do it?
Answer: Permanently removing tokens from circulation to reduce supply and potentially increase value
Token burning sends tokens to an inaccessible address, permanently removing them from circulating supply, which can create deflationary pressure and increase scarcity.
Which lending protocol introduced the concept of 'aTokens' that accrue interest in real time?
Answer: Aave
Aave introduced aTokens (e.g., aDAI, aUSDC) that are minted on deposit and accrue interest in real time directly in the holder's wallet.
What is the 'money lego' concept in DeFi?
Answer: The ability to combine and stack DeFi protocols like building blocks to create new financial products
Money legos refers to the composability of DeFi protocols, where open standards allow developers to stack and combine protocols to build more complex financial applications.
What is a 'rug pull' in the DeFi context?
Answer: A scam where developers abandon a project and withdraw all liquidity after attracting investor funds
A rug pull is an exit scam where project developers suddenly drain a liquidity pool or treasury, leaving investors with worthless tokens.
What does 'APY' represent in DeFi yield products?
Answer: Annual Percentage Yield, which includes the effect of compounding interest
APY (Annual Percentage Yield) represents the real rate of return on an investment over one year, including the compounding of interest or rewards.
In DeFi, what is 'collateralization ratio' in a lending protocol?
Answer: The ratio of collateral value to borrowed value, determining how much a user can borrow
The collateralization ratio is the ratio of deposited collateral value to the amount borrowed, and protocols require it to stay above a minimum threshold to prevent bad debt.