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Advanced DeFi Mechanics
1) What is the defining characteristic of a flash loan in DeFi?
A. A loan that requires high upfront collateral
B. A loan that must be repaid within the same blockchain transaction
C. A long-term loan with yearly interest
D. A loan only available to institutions
2) A sandwich attack is an example of which type of MEV strategy?
A. Borrowing from a lending pool
B. Oracle manipulation
C. Front-running and back-running a target transaction
D. Yield farming
3) In cross-protocol yield strategies, “looping collateral” refers to:
A. Taking out multiple loans and re-depositing borrowed funds repeatedly to increase exposure
B. Only supplying liquidity on one protocol
C. Mining tokens on a private blockchain
D. Performing token swaps on the same protocol
4) Which of the following best describes “concentrated liquidity” in automated market makers (AMMs)?
A. Liquidity provided evenly across all possible prices
B. Liquidity that only covers a specific price range to maximize capital efficiency
C. Liquidity provided only in stablecoin pools
D. Liquidity that automatically disappears at night
5) What distinguishes a real-yield protocol from one with ponzinomics?
A. It offers extremely high APYs with no revenue source
B. It pays rewards only in its native token
C. It generates yield from actual revenue or fees, not purely token emissions
D. It distributes tokens only to founders
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