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Lesson # 3
Audits, Code Quality & On-Chain Activity
Blockchain Basics
1. What is a limitation of smart contract audits?
A. They always guarantee bug-free code
B. They ensure the team will act ethically
C. They can detect rug pulls in advance
D. They don’t assess business models or tokenomics
2. If a DeFi project has high Total Value Locked (TVL) but most of it comes from short-term liquidity mining, what does this suggest?
A. The project has high long-term organic usage
B. The project is highly decentralized
C. The TVL might be artificially inflated
D. Token emissions are irrelevant
3. Which of the following is a GitHub red flag when analyzing a Web3 project?
A. README includes setup instructions
B. Multiple contributors with regular activity
C. Only one developer committing all the code
D. Active pull request discussions
4. A protocol claims it is “live on mainnet,” but only a few wallets interact with its contracts over months. What does this indicate?
A. The project is gaining strong adoption
B. It’s likely a highly secure system
C. There’s little to no real user traction
D. Token price will likely surge soon
5. What does Token Terminal help analysts evaluate?
A. Code originality and licensing
B. User sentiment from Discord
C. Protocol revenue and tokenholder value
D. Smart contract deployment scripts