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Lesson # 4
Token Utility, Distribution & Sustainability
Blockchain Basics
1. Why is high token inflation a potential risk in crypto projects?
A. It leads to fewer tokens being created
B. It makes the token more scarce and valuable
C. It can increase token price due to more demand
D. It can cause the token’s value to drop as supply grows faster than demand
2. Which of the following is a red flag in a token unlock schedule?
A. Tokens unlock slowly over several years with cliffs
B. Team and investor tokens unlock gradually
C. A large number of tokens unlock all at once in a short period
D. Unlock schedule is clearly published in the whitepaper
3. What best describes a speculative token?
A. A token used for paying network fees or staking
B. A token bought mainly for profit without real use case
C. A governance token with voting rights in a DAO
D. A token used to access in-game rewards
4. What is the "flywheel effect" in a crypto project?
A. A cycle where token prices are manipulated
B. A marketing method used to attract investors
C. A self-reinforcing cycle where usage drives growth and value
D. A system where all tokens unlock at the same time
5. What is one key difference between Arbitrum’s $ARB and Aptos’s $APT tokens?
A. $ARB is used to pay transaction fees, while $APT is only for governance
B. $APT is mainly used for governance, while $ARB is for staking
C. $ARB is a utility token for payments, while $APT has no network role
D. $APT is required for network fees and staking, while $ARB is used for governance