What is DeFi quiz

Question 1

What is the key difference between DeFi and a traditional bank?

Accepted Answer

In DeFi, your assets stay in your own wallet and the rules are enforced by code

Question 2

Why are DeFi loans overcollateralized?

Accepted Answer

Because there is no credit check, so collateral worth more than the loan protects lenders

Question 3

What does composability mean in DeFi?

Accepted Answer

Protocols can plug into each other like building blocks

Question 4

Which of these is the most direct risk of using a DeFi protocol?

Accepted Answer

A bug in the smart contract could let an attacker drain the funds

Question 5

What is a sensible reaction to a brand new protocol advertising a yield of several hundred percent paid in its own token?

Accepted Answer

Treat it as a warning sign and ask where the return actually comes from

What is DeFi: the quiz