Deep Dive into XRPL DeFi Review Quiz

What is one of the advantages that DeFi has over traditional finance systems?

DeFi has looser geographical restrictions.

DeFi requires complicated documentation.

DeFi is more transparent.

DeFi doesn’t require an account.

Why is trading on the XRPL a little different than on other blockchains?

The XRPL offers a built-in software wallet where users can safely store their currency.

The XRPL uses a Central Limit Order Book instead of an AMM.

The XRPL uses an AMM instead of a Central Limit Order Book.

The XRPL uses both a Central Limit Order Book and an AMM.

How do AMMs work?

AMMs work by holding currency in order books, then the ledger randomizes a fair exchange rate between the different currencies.

AMMs work by pooling currency in liquidity pools, then algorithmically picking a fair exchange rate between the different currencies.

AMMs work by pooling currency in liquidity pools, then the AMM leadership group picks a fair exchange rate between the different currencies.

AMMs work by pooling currency in liquidity pools, then the AMM community votes on a fair exchange rate between the different currencies.

What does DeFi stand for, and what is its primary goal?

DeFi stands for Digital Finance, aiming to centralize financial services.

DeFi stands for Decentralized Finance, aiming to remove all financial intermediaries.

DeFi stands for De-established Finance, aiming to increase geographical restrictions.

DeFi stands for Designated Finance, aiming to limit financial innovation.

How do AMMs work?

AMMs work by holding currency in order books, then the ledger randomizes a fair exchange rate between the different currencies.

AMMs work by pooling currency in liquidity pools, then algorithmically picking a fair exchange rate between the different currencies.

AMMs work by pooling currency in liquidity pools, then the AMM leadership group picks a fair exchange rate between the different currencies.

AMMs work by pooling currency in liquidity pools, then the AMM community votes on a fair exchange rate between the different currencies.

Where do AMMs store currency?

In a hedge fund.

In a decentralized exchange.

In a community moderated account.

In a liquidity pool.

What is one of the advantages that DeFi has over traditional finance systems?

DeFi has looser geographical restrictions.

DeFi requires complicated documentation.

DeFi is more transparent.

DeFi doesn’t require an account.

What should you look for when choosing a DeFi platform to ensure security?

Utilizing and trusting the platform's security features.

Understanding how security features like multi-signature authentication work.

Avoiding platforms that use encryption techniques.

Only using government-backed platforms.

Where is the best place to store your private keys?

Written on a note.

Emailing them to yourself.

Remembering them.

In a hardware or software wallet.

What is Pathfinding?

Pathfinding is the process of finding an efficient route for trading tokens between two Decentralized Exchanges (DEXs).

Pathfinding is the process of finding an efficient route for trading between two tokens on a DEX.

Pathfinding is the process of finding an efficient route for sending currency to others.

Pathfinding is the process of finding an efficient route for exchanging fiat currency for cryptocurrencies.