Podcast
Questions and Answers
In the context of decentralized applications (dApps), what critical attribute distinguishes them from traditional web applications?
In the context of decentralized applications (dApps), what critical attribute distinguishes them from traditional web applications?
- DApps integrate exclusively with legacy databases for efficient data retrieval and storage.
- DApps, unlike traditional apps, leverage a distributed, peer-to-peer infrastructure, often incorporating smart contracts. (correct)
- DApps are primarily developed using proprietary coding languages optimized for mobile platforms.
- DApps operate on centralized servers with enhanced security protocols, ensuring user data integrity.
Which architectural tenet is most crucial for a blockchain oracle to ensure reliability and integrity when interacting with a decentralized application (dApp)?
Which architectural tenet is most crucial for a blockchain oracle to ensure reliability and integrity when interacting with a decentralized application (dApp)?
- Oracles need to prioritize data connectivity over security, maximizing the amount of accessible real-world information.
- Oracles must employ mechanisms for ensuring data reliability and provenance, such as cryptographic verification and consensus protocols. (correct)
- Oracles should be designed with an emphasis on complete isolation from external environments to prevent data contamination.
- Oracles must utilize exclusively centralized data feeds to guarantee data consistency and minimize latency.
What intrinsic property of a Decentralized Autonomous Organization (DAO) contributes most significantly to its resilience against traditional hierarchical failures?
What intrinsic property of a Decentralized Autonomous Organization (DAO) contributes most significantly to its resilience against traditional hierarchical failures?
- The integration of immutable smart contracts enforcing predefined rules, enabling autonomous operation and transparent governance. (correct)
- The utilization of opaque governance models that limit member participation to prevent decision paralysis.
- The reliance on centralized authorities like CEOs and Boards of Directors for strategic decision-making.
- The dependence on geographically concentrated server infrastructure managed by a core development team.
When evaluating the potential impact of blockchain oracles on dApps, which security consideration is most paramount in preventing vulnerabilities?
When evaluating the potential impact of blockchain oracles on dApps, which security consideration is most paramount in preventing vulnerabilities?
Consider a scenario where a DAO is designed to manage a venture capital fund; what mechanism is MOST critical to ensuring judicious and unbiased investment decisions?
Consider a scenario where a DAO is designed to manage a venture capital fund; what mechanism is MOST critical to ensuring judicious and unbiased investment decisions?
When evaluating a newly proposed Decentralized Application claiming to offer 'complete data integrity', which aspect is most critical to assess to validate this claim?
When evaluating a newly proposed Decentralized Application claiming to offer 'complete data integrity', which aspect is most critical to assess to validate this claim?
Within the context of Decentralized Finance (DeFi), how does 'trustless computation' contribute to the revolutionary nature of dApps?
Within the context of Decentralized Finance (DeFi), how does 'trustless computation' contribute to the revolutionary nature of dApps?
A new DeFi protocol claims to achieve scalability through off-chain computations while maintaining trustlessness; which cryptographic technique is MOST essential to scrutinize to validate this claim?
A new DeFi protocol claims to achieve scalability through off-chain computations while maintaining trustlessness; which cryptographic technique is MOST essential to scrutinize to validate this claim?
In the orchestration of a decentralized prediction market built on a dApp architecture, what role does a blockchain oracle play in ensuring reliable and impartial outcomes?
In the orchestration of a decentralized prediction market built on a dApp architecture, what role does a blockchain oracle play in ensuring reliable and impartial outcomes?
Decentralized Autonomous Organizations (DAOs) offer several advantages for entrepreneurs; which factor most contributes to the reduction of traditional operational overhead?
Decentralized Autonomous Organizations (DAOs) offer several advantages for entrepreneurs; which factor most contributes to the reduction of traditional operational overhead?
What risk is most amplified when a DAO's governance token distribution is heavily concentrated among a small subset of its members?
What risk is most amplified when a DAO's governance token distribution is heavily concentrated among a small subset of its members?
Considering the interrelation between oracles and dApps, which sophisticated attack vector poses the greatest threat to the integrity of trustless decentralized systems?
Considering the interrelation between oracles and dApps, which sophisticated attack vector poses the greatest threat to the integrity of trustless decentralized systems?
When assessing the 'long-term viability' of a DeFi lending protocol, what factor presents the LOWEST risk to its sustainability despite showing initial traction?
When assessing the 'long-term viability' of a DeFi lending protocol, what factor presents the LOWEST risk to its sustainability despite showing initial traction?
What mechanism is most crucial for ensuring a reliable settlement of a decentralized insurance protocol that covers weather-related crop failures, especially where payouts are triggered by external climate data?
What mechanism is most crucial for ensuring a reliable settlement of a decentralized insurance protocol that covers weather-related crop failures, especially where payouts are triggered by external climate data?
What is the primary rationale for Wyoming being the first state to recognize DAOs as legal entities under specific Limited Liability Company (LLC) statutes?
What is the primary rationale for Wyoming being the first state to recognize DAOs as legal entities under specific Limited Liability Company (LLC) statutes?
What inherent limitation of smart contracts necessitates the integration of blockchain oracles within decentralized application (dApp) architectures?
What inherent limitation of smart contracts necessitates the integration of blockchain oracles within decentralized application (dApp) architectures?
What is the most critical factor in determining the long-term success and stability of a DeFi protocol dependent on community governance through a DAO structure?
What is the most critical factor in determining the long-term success and stability of a DeFi protocol dependent on community governance through a DAO structure?
When evaluating potential vulnerabilities in a cross-chain bridge dApp, what attack vector should be considered as presenting the HIGHEST systemic risk?
When evaluating potential vulnerabilities in a cross-chain bridge dApp, what attack vector should be considered as presenting the HIGHEST systemic risk?
Which security measure offers the MOST robust protection against private key compromise for a user actively participating in a DeFi ecosystem?
Which security measure offers the MOST robust protection against private key compromise for a user actively participating in a DeFi ecosystem?
What is the most critical element for DeFi protocols, which rely on on-chain data, to defend against data manipulation?
What is the most critical element for DeFi protocols, which rely on on-chain data, to defend against data manipulation?
Considering a DeFi lending protocol with an algorithmic interest rate model, what condition could lead to a 'black swan' liquidation event across the platform?
Considering a DeFi lending protocol with an algorithmic interest rate model, what condition could lead to a 'black swan' liquidation event across the platform?
In a DeFi lending platform that uses a 'lending pool', what is the MOST accurate technical explanation for how interest is distributed to investors?
In a DeFi lending platform that uses a 'lending pool', what is the MOST accurate technical explanation for how interest is distributed to investors?
When a DeFi borrower deposits collateral to take out a loan, which factor could lead to collateral liquidation, and what action should be taken to prevent the liquidation?
When a DeFi borrower deposits collateral to take out a loan, which factor could lead to collateral liquidation, and what action should be taken to prevent the liquidation?
Beyond avoiding simple Ponzi schemes, what is the most effective due diligence strategy for new Decentralized Finance (DeFi) investors to undertake?
Beyond avoiding simple Ponzi schemes, what is the most effective due diligence strategy for new Decentralized Finance (DeFi) investors to undertake?
How do blockchain networks use the process of 'staking' in a proof-of-stake (PoS) consensus mechanism?
How do blockchain networks use the process of 'staking' in a proof-of-stake (PoS) consensus mechanism?
If a blockchain platform implements 'staking as a service,' what critical security consideration MUST be evaluated to mitigate potential risks?
If a blockchain platform implements 'staking as a service,' what critical security consideration MUST be evaluated to mitigate potential risks?
If a proof-of-stake blockchain protocol alters its staking reward mechanism, what potential outcome should token holders be MOST concerned about?
If a proof-of-stake blockchain protocol alters its staking reward mechanism, what potential outcome should token holders be MOST concerned about?
How does providing 'liquidity' in a decentralized exchange (DEX) facilitate trading, and what incentive is typically offered to liquidity providers?
How does providing 'liquidity' in a decentralized exchange (DEX) facilitate trading, and what incentive is typically offered to liquidity providers?
Beyond high APY, what strategy presents the MOST accurate risk mitigation approach on yield farming?
Beyond high APY, what strategy presents the MOST accurate risk mitigation approach on yield farming?
What distinguishes a 'rug pull' scam from other exploits in the DeFi space, particularly considering its impact on investors?
What distinguishes a 'rug pull' scam from other exploits in the DeFi space, particularly considering its impact on investors?
Which technique best helps those new to DeFi to protect against hacks and scams?
Which technique best helps those new to DeFi to protect against hacks and scams?
Within the context of DeFi security, what role does the implementation of multi-factor authentication (MFA) play in mitigating account takeover attacks?
Within the context of DeFi security, what role does the implementation of multi-factor authentication (MFA) play in mitigating account takeover attacks?
What best describes the concept of Total Value Locked (TVL) in DeFi?
What best describes the concept of Total Value Locked (TVL) in DeFi?
In evaluating the tokenomics of a DeFi protocol, which aspect relates most directly to the long-term incentives for network participation and security?
In evaluating the tokenomics of a DeFi protocol, which aspect relates most directly to the long-term incentives for network participation and security?
When researching a cryptocurrency project team, what measure would most effectively indicate a higher probability of project legitimacy and long-term sustainability?
When researching a cryptocurrency project team, what measure would most effectively indicate a higher probability of project legitimacy and long-term sustainability?
Central Bank Digital Currencies (CBDCs) present several conceptual challenges; what is the MOST contentious issue surrounding their implementation in democratic societies?
Central Bank Digital Currencies (CBDCs) present several conceptual challenges; what is the MOST contentious issue surrounding their implementation in democratic societies?
As opposed to a permissionless system, what is an inherent drawback of private blockchains and how does this affect their use in CBDCs?
As opposed to a permissionless system, what is an inherent drawback of private blockchains and how does this affect their use in CBDCs?
If a cybercriminal has a background in social engineering, which hack below would they be most likely to use?
If a cybercriminal has a background in social engineering, which hack below would they be most likely to use?
In assessing the legitimacy of a DeFi project, which measure signals great cause for concern?
In assessing the legitimacy of a DeFi project, which measure signals great cause for concern?
In the case of FTX, what tactic helped the CULT OF PERSONALITY that occurred?
In the case of FTX, what tactic helped the CULT OF PERSONALITY that occurred?
When analyzing the collapse of FTX what should ethical investors prioritize?
When analyzing the collapse of FTX what should ethical investors prioritize?
A DeFi protocol introduces a novel token burn mechanism designed to reduce supply during periods of low network activity; what complex game-theoretic challenge must be addressed to ensure the mechanism's efficiency and prevent network destabilization?
A DeFi protocol introduces a novel token burn mechanism designed to reduce supply during periods of low network activity; what complex game-theoretic challenge must be addressed to ensure the mechanism's efficiency and prevent network destabilization?
In creating a decentralized prediction market using a dApp, what considerations are most crucial to ensure the oracle's data integrity from advanced manipulation techniques such as 'Byzantine Fault Tolerance'?
In creating a decentralized prediction market using a dApp, what considerations are most crucial to ensure the oracle's data integrity from advanced manipulation techniques such as 'Byzantine Fault Tolerance'?
How can a newly formed DAO effectively mitigate the risks associated with concentrated voting power among early adopters and ensure broader participation in governance decisions over time?
How can a newly formed DAO effectively mitigate the risks associated with concentrated voting power among early adopters and ensure broader participation in governance decisions over time?
Assume a cross-chain bridge dApp experiences a temporary security breach; what strategies are MOST viable for ensuring user asset security and maintaining cross-chain transactional integrity during the incident?
Assume a cross-chain bridge dApp experiences a temporary security breach; what strategies are MOST viable for ensuring user asset security and maintaining cross-chain transactional integrity during the incident?
Within a DeFi protocol focused on 'algorithmic stablecoins,' which mechanism is critical for managing potential de-pegging events and maintaining price stability during extreme market volatility:
Within a DeFi protocol focused on 'algorithmic stablecoins,' which mechanism is critical for managing potential de-pegging events and maintaining price stability during extreme market volatility:
In a proof-of-stake (PoS) blockchain undergoing a contentious hard fork, what complex mechanism determines the economic incentives for validators to align with the 'correct' chain and prevent a chain split?
In a proof-of-stake (PoS) blockchain undergoing a contentious hard fork, what complex mechanism determines the economic incentives for validators to align with the 'correct' chain and prevent a chain split?
In a decentralized exchange (DEX) deploying a novel automated market maker (AMM) algorithm, what factors should a smart contract auditor focus on to assess potential arbitrage vulnerabilities that could lead to impermanent loss or manipulation?
In a decentralized exchange (DEX) deploying a novel automated market maker (AMM) algorithm, what factors should a smart contract auditor focus on to assess potential arbitrage vulnerabilities that could lead to impermanent loss or manipulation?
When evaluating the economic sustainability of a DeFi protocol that relies heavily on liquidity mining incentives, what is the MOST critical metric to assess beyond the initially high Annual Percentage Yield (APY) projections?
When evaluating the economic sustainability of a DeFi protocol that relies heavily on liquidity mining incentives, what is the MOST critical metric to assess beyond the initially high Annual Percentage Yield (APY) projections?
During a 'black swan' event impacting a large-scale DeFi lending platform, what risk management approach offers the most resilience against cascading liquidations and systemic failure?
During a 'black swan' event impacting a large-scale DeFi lending platform, what risk management approach offers the most resilience against cascading liquidations and systemic failure?
Consider a DAO managing a collective art fund; which governance mechanism is MOST effective in preventing subjective biases and ensuring impartial art acquisition decisions within the community?
Consider a DAO managing a collective art fund; which governance mechanism is MOST effective in preventing subjective biases and ensuring impartial art acquisition decisions within the community?
In a dApp designed as a decentralized insurance marketplace, what mechanism BEST ensures the fair and transparent settlement of claims, especially in scenarios involving ambiguous or disputable events?
In a dApp designed as a decentralized insurance marketplace, what mechanism BEST ensures the fair and transparent settlement of claims, especially in scenarios involving ambiguous or disputable events?
In a DeFi protocol offering cross-chain lending with variable interest rates, what algorithmic risk mitigation strategy MOST effectively prevents the exploitation of arbitrage opportunities that could destabilize the lending pools?
In a DeFi protocol offering cross-chain lending with variable interest rates, what algorithmic risk mitigation strategy MOST effectively prevents the exploitation of arbitrage opportunities that could destabilize the lending pools?
What specific regulatory hurdle poses the greatest risk to the widespread adoption of Decentralized Autonomous Organizations (DAOs) as legitimate legal entities in international jurisdictions beyond Wyoming?
What specific regulatory hurdle poses the greatest risk to the widespread adoption of Decentralized Autonomous Organizations (DAOs) as legitimate legal entities in international jurisdictions beyond Wyoming?
How can DeFi protocols optimally utilize layer-2 scaling solutions, like zk-Rollups or optimistic rollups, to enhance transaction throughput without sacrificing the trustless properties inherent in decentralized finance?
How can DeFi protocols optimally utilize layer-2 scaling solutions, like zk-Rollups or optimistic rollups, to enhance transaction throughput without sacrificing the trustless properties inherent in decentralized finance?
What strategy best allows DeFi protocols dependent on community voting to guard against 'governance attacks' or malicious takeover bids in low voter turnout scenarios?
What strategy best allows DeFi protocols dependent on community voting to guard against 'governance attacks' or malicious takeover bids in low voter turnout scenarios?
If a cross-chain bridge dApp implements a 'threshold signature scheme' (TSS) for key management, what attack vector poses the GREATEST risk to the bridge's security, and how can it be mitigated effectively?
If a cross-chain bridge dApp implements a 'threshold signature scheme' (TSS) for key management, what attack vector poses the GREATEST risk to the bridge's security, and how can it be mitigated effectively?
To what extent does 'homomorphic encryption' bolster data privacy within DeFi applications, and under what circumstances would fully homomorphic encryption (FHE) offer a substantial advantage over other cryptographic techniques?
To what extent does 'homomorphic encryption' bolster data privacy within DeFi applications, and under what circumstances would fully homomorphic encryption (FHE) offer a substantial advantage over other cryptographic techniques?
In a DeFi lending protocol utilizing 'undercollateralized loans', what robust mechanism is MOST crucial for managing counterparty risk and preventing systemic losses due to potential borrower defaults?
In a DeFi lending protocol utilizing 'undercollateralized loans', what robust mechanism is MOST crucial for managing counterparty risk and preventing systemic losses due to potential borrower defaults?
Within a 'Decentralized Physical Infrastructure Network' (DePIN) leveraging blockchain, how can its builders make data manipulation by malicious actors prohibitively expensive?
Within a 'Decentralized Physical Infrastructure Network' (DePIN) leveraging blockchain, how can its builders make data manipulation by malicious actors prohibitively expensive?
Considering the complexity of blockchain oracles integrating off-chain data, what is the most critical aspect of validating oracle data to determine if a blockchain oracle is reliable?
Considering the complexity of blockchain oracles integrating off-chain data, what is the most critical aspect of validating oracle data to determine if a blockchain oracle is reliable?
A new DeFi protocol advertises 'complete decentralization,' yet its governance is governed by a small group; what technical due-diligence step offers the surest way of challenging the 'complete decentralization' claim?
A new DeFi protocol advertises 'complete decentralization,' yet its governance is governed by a small group; what technical due-diligence step offers the surest way of challenging the 'complete decentralization' claim?
How does 'trustless computation' offer potential to change all dApps?
How does 'trustless computation' offer potential to change all dApps?
If total value locked (TVL) is important in a DeFi protocol, what does a larger TVL signify?
If total value locked (TVL) is important in a DeFi protocol, what does a larger TVL signify?
DAOs reduce overhead for entrepreneurs; what is the MOST significant way?
DAOs reduce overhead for entrepreneurs; what is the MOST significant way?
Beyond just implementing multi-factor authentication, what other security protocols are vital for users involved in DeFi?
Beyond just implementing multi-factor authentication, what other security protocols are vital for users involved in DeFi?
How can DeFi protocols MOST defend against data manipulation?
How can DeFi protocols MOST defend against data manipulation?
If assessing a DeFi lending platform with an algorithmic interest rate, what situation is WORST?
If assessing a DeFi lending platform with an algorithmic interest rate, what situation is WORST?
What investment strategy BEST helps new DeFi investors.
What investment strategy BEST helps new DeFi investors.
Aside from yield, how can you BEST mitigate risk on yield farming?
Aside from yield, how can you BEST mitigate risk on yield farming?
What is a key tokenomic incentive?
What is a key tokenomic incentive?
For safety, how can a user best protect themself?
For safety, how can a user best protect themself?
When thinking of the incentives of a project, which metric should NOT be considered?
When thinking of the incentives of a project, which metric should NOT be considered?
In a DAO what factor indicates higher cause for concern?
In a DAO what factor indicates higher cause for concern?
Ethical investors need to focus on what? (Pick the MOST correct)
Ethical investors need to focus on what? (Pick the MOST correct)
What is the MAIN risk of private blockchains?
What is the MAIN risk of private blockchains?
What is one of the advantages of DeFi?
What is one of the advantages of DeFi?
What should a user do before joining a new project?
What should a user do before joining a new project?
How can you tell if a company is high quality?
How can you tell if a company is high quality?
From the video, what should you do if you have coins on an exchange?
From the video, what should you do if you have coins on an exchange?
If a friend calls you about an investment, what should you do?
If a friend calls you about an investment, what should you do?
You find something in a whitepaper, what should you do? Pick the BEST answer
You find something in a whitepaper, what should you do? Pick the BEST answer
When researching team members, you need to focus on what? What is MOST important?
When researching team members, you need to focus on what? What is MOST important?
When picking crypto, what factor indicates a greater indication of legitimacy?
When picking crypto, what factor indicates a greater indication of legitimacy?
Which cognitive bias is the hardest to spot?
Which cognitive bias is the hardest to spot?
What should you do first? Pick the BEST answer
What should you do first? Pick the BEST answer
What is MOST helpful when learning more about a project team?
What is MOST helpful when learning more about a project team?
To determine if a team member has an adequate background, what factor is important?
To determine if a team member has an adequate background, what factor is important?
When evaluating a DeFi protocol governed by a DAO proposing a change to its token emission rate, what advanced econometric technique would BEST reveal the potential long-term impact on token value and network stability, considering complex feedback loops?
When evaluating a DeFi protocol governed by a DAO proposing a change to its token emission rate, what advanced econometric technique would BEST reveal the potential long-term impact on token value and network stability, considering complex feedback loops?
Considering a dApp designed as a decentralized autonomous organization (DAO) for funding scientific research, which mechanism is MOST effective in preventing bias and ensuring rigorous scientific validation of proposals, given potential conflicts of interest among voting members?
Considering a dApp designed as a decentralized autonomous organization (DAO) for funding scientific research, which mechanism is MOST effective in preventing bias and ensuring rigorous scientific validation of proposals, given potential conflicts of interest among voting members?
In a cross-chain bridge dApp utilizing a multi-signature scheme involving numerous validators, what cryptographic technique offers the MOST robust defense against collusion among a subset of validators aiming to maliciously alter transaction confirmations and siphon funds?
In a cross-chain bridge dApp utilizing a multi-signature scheme involving numerous validators, what cryptographic technique offers the MOST robust defense against collusion among a subset of validators aiming to maliciously alter transaction confirmations and siphon funds?
In the context of DeFi lending protocols, what sophisticated mechanism can mitigate the risk of cascading liquidations during periods of extreme market volatility, ensuring that the protocol remains solvent and preventing systemic failure?
In the context of DeFi lending protocols, what sophisticated mechanism can mitigate the risk of cascading liquidations during periods of extreme market volatility, ensuring that the protocol remains solvent and preventing systemic failure?
In a DAO managing a fractionalized NFT collection, what method for governance would ensure the MOST equitable and efficient decision-making process regarding the lending of individual NFTs to metaverse exhibitions, considering varying token holder expertise and engagement levels?
In a DAO managing a fractionalized NFT collection, what method for governance would ensure the MOST equitable and efficient decision-making process regarding the lending of individual NFTs to metaverse exhibitions, considering varying token holder expertise and engagement levels?
A DeFi protocol implements a 'rebasing' mechanism, adjusting token balances algorithmically to maintain a target price. What potential vulnerability is MOST critical to address to prevent sophisticated manipulation by entities exploiting time-dependent oracle vulnerabilities or differential gas costs on competing blockchain networks?
A DeFi protocol implements a 'rebasing' mechanism, adjusting token balances algorithmically to maintain a target price. What potential vulnerability is MOST critical to address to prevent sophisticated manipulation by entities exploiting time-dependent oracle vulnerabilities or differential gas costs on competing blockchain networks?
When integrating real-world asset (RWA) data into a DeFi protocol via blockchain oracles, what cryptographic technique provides the MOST verifiable assurance that the data has not been tampered with during transmission, especially in scenarios where the oracle network is partially untrusted?
When integrating real-world asset (RWA) data into a DeFi protocol via blockchain oracles, what cryptographic technique provides the MOST verifiable assurance that the data has not been tampered with during transmission, especially in scenarios where the oracle network is partially untrusted?
In the design of a decentralized identity (DID) dApp, what advanced method is MOST crucial for safeguarding user privacy while ensuring compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations across multiple jurisdictions?
In the design of a decentralized identity (DID) dApp, what advanced method is MOST crucial for safeguarding user privacy while ensuring compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations across multiple jurisdictions?
When designing a dApp enabling decentralized insurance claims processing, what approach BEST guarantees the impartiality and accuracy of claims adjudication when relying on external IoT sensor data to trigger payouts related to weather events, given the potential for sensor malfunction or malicious data injection?
When designing a dApp enabling decentralized insurance claims processing, what approach BEST guarantees the impartiality and accuracy of claims adjudication when relying on external IoT sensor data to trigger payouts related to weather events, given the potential for sensor malfunction or malicious data injection?
In a DeFi protocol employing a novel 'dynamic set balancing' mechanism to automatically adjust the composition of a liquidity pool based on market demand, what stability challenge is MOST critical to address algorithmically, and how can it be mitigated?
In a DeFi protocol employing a novel 'dynamic set balancing' mechanism to automatically adjust the composition of a liquidity pool based on market demand, what stability challenge is MOST critical to address algorithmically, and how can it be mitigated?
When designing a DAO intended to manage a public goods funding initiative, what mechanism is MOST critical for ensuring fair and efficient capital allocation while incentivizing broad community participation and preventing strategic manipulation of the funding process?
When designing a DAO intended to manage a public goods funding initiative, what mechanism is MOST critical for ensuring fair and efficient capital allocation while incentivizing broad community participation and preventing strategic manipulation of the funding process?
When building a dApp aimed at creating a decentralized autonomous organization (DAO) for intellectual property licensing, what mechanism is MOST critical for managing complex licensing agreements and ensuring fair compensation for IP creators?
When building a dApp aimed at creating a decentralized autonomous organization (DAO) for intellectual property licensing, what mechanism is MOST critical for managing complex licensing agreements and ensuring fair compensation for IP creators?
In the configuration of a DeFi lending protocol offering cross-chain loans, what algorithmic risk mitigation strategy offers the GREATEST resilience against the exploitation of arbitrage opportunities that could destabilize the lending pools through manipulation of oracle data?
In the configuration of a DeFi lending protocol offering cross-chain loans, what algorithmic risk mitigation strategy offers the GREATEST resilience against the exploitation of arbitrage opportunities that could destabilize the lending pools through manipulation of oracle data?
When designing a dApp as a decentralized prediction market, what protocol upgrade BEST ensures the oracle's data integrity from advanced manipulation techniques such as 'Byzantine Fault Tolerance,' given the complex, multi-sourced data requirements?
When designing a dApp as a decentralized prediction market, what protocol upgrade BEST ensures the oracle's data integrity from advanced manipulation techniques such as 'Byzantine Fault Tolerance,' given the complex, multi-sourced data requirements?
When evaluating the security of a DeFi protocol, which of the following attack vectors represents the MOST SIGNIFICANT systemic risk to the entire ecosystem, encompassing both immediate financial losses and long-term erosion of user trust?
When evaluating the security of a DeFi protocol, which of the following attack vectors represents the MOST SIGNIFICANT systemic risk to the entire ecosystem, encompassing both immediate financial losses and long-term erosion of user trust?
To ensure the long-term viability of a DeFi protocol reliant on DAO governance, what sophisticated mechanism is MOST crucial for mitigating the risks associated with apathetic voter turnout, especially in scenarios involving complex protocol upgrades or critical parameter adjustments?
To ensure the long-term viability of a DeFi protocol reliant on DAO governance, what sophisticated mechanism is MOST crucial for mitigating the risks associated with apathetic voter turnout, especially in scenarios involving complex protocol upgrades or critical parameter adjustments?
In a DeFi protocol utilizing sophisticated Automated Market Makers (AMMs) with dynamic fee adjustments, what theoretical concern presents the HIGHEST long-term risk to the protocol’s sustainability and user participation?
In a DeFi protocol utilizing sophisticated Automated Market Makers (AMMs) with dynamic fee adjustments, what theoretical concern presents the HIGHEST long-term risk to the protocol’s sustainability and user participation?
Within a dApp ecosystem featuring both on-chain and off-chain components, which presents the MOST accurate characterization of the 'oracle problem' concerning the reliability of external data sources?
Within a dApp ecosystem featuring both on-chain and off-chain components, which presents the MOST accurate characterization of the 'oracle problem' concerning the reliability of external data sources?
Assuming a scenario where a cross-chain bridge uses a 'liquidity pool' model, what issue poses the HIGHEST systemic risk?
Assuming a scenario where a cross-chain bridge uses a 'liquidity pool' model, what issue poses the HIGHEST systemic risk?
Flashcards
What are dApps?
What are dApps?
Web applications built on top of open, decentralized, peer-to-peer infrastructure services.
Are DApps decentralized?
Are DApps decentralized?
dApps operate on Ethereum, an open public decentralized platform.
Are dApps deterministic?
Are dApps deterministic?
dApps perform the same function irrespective of the environment.
Are DApps turing complete?
Are DApps turing complete?
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Are DApps isolated?
Are DApps isolated?
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What is the role of Blockchain Oracles?
What is the role of Blockchain Oracles?
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What are Blockchain Oracles?
What are Blockchain Oracles?
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What are DAOs?
What are DAOs?
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What are DeFi Protocols?
What are DeFi Protocols?
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What is DeFi Lending?
What is DeFi Lending?
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What is a Lending Pool?
What is a Lending Pool?
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Why use DeFi Lending?
Why use DeFi Lending?
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Why DeFi Borrowing?
Why DeFi Borrowing?
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What is crypto staking?
What is crypto staking?
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What is Yield Farming?
What is Yield Farming?
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What are Yield Farming rewards?
What are Yield Farming rewards?
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What is Cryptocurrency in the context of Yield Farming?
What is Cryptocurrency in the context of Yield Farming?
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What are Liquidity Pools?
What are Liquidity Pools?
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What are DeFi Lending scams?
What are DeFi Lending scams?
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What are Central Bank Digital Currencies?
What are Central Bank Digital Currencies?
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What are the general properties of CBDCs?
What are the general properties of CBDCs?
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What is Blockchain Analysis?
What is Blockchain Analysis?
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What is Crypto Analytics?
What is Crypto Analytics?
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What are On-Chain Analytics?
What are On-Chain Analytics?
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What is On-Chain Analysis?
What is On-Chain Analysis?
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What is the importance of On-Chain Analysis?
What is the importance of On-Chain Analysis?
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What is DeFi Llama?
What is DeFi Llama?
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What data and features CoinMarketCap provide?
What data and features CoinMarketCap provide?
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What are essential tools in the DYOR process?
What are essential tools in the DYOR process?
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What are the PROPER steps in Due Diligence?
What are the PROPER steps in Due Diligence?
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What is Dunning-Kruger Effect?
What is Dunning-Kruger Effect?
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What is Confirmation Bias?
What is Confirmation Bias?
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What is Sunk Cost Fallacy in Crypto?
What is Sunk Cost Fallacy in Crypto?
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What is Backfire Effect in Crypto?
What is Backfire Effect in Crypto?
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What is
What is
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Study Notes
Blockchain Layer 2 Topics
- Dapps
- Oracles and Dapps
- DAOs
- Dapps: How to
DApps (Decentralized Applications)
- Built on top of open, decentralized, peer-to-peer infrastructure services
- Web applications combine a smart contract and a frontend user interface
- dApps are "App" but in a decentralized network
- User interface over a smart contract
- dApps are accessible and transparent, like open APIs
- Can include a smart contract that someone else has written
- The Ethereum platform has over 250 decentralized applications
- Over 50% of the cryptocurrency market
- Provides customized software networks for major companies
- 78% of dApps are on Ethereum
- dApps differ from Apps as they are Decentralized vs. Apps (Centralized)
DApp Characteristics
- Decentralized - dApps operate on Ethereum, an open public decentralized platform.
- Deterministic - dApps perform the same function irrespective of the environment in which they get executed.
- Turing complete - dapps can perform any action given the required resources.
- Isolated - dApps are executed in a virtual environment known as Ethereum Virtual Machine IEVM) so that if the smart contract has a bug, it won’t hamper the normal functioning of the blockchain network.
Benefits of Dapp Development
- Zero downtime
- Privacy
- Resistance to censorship
- Complete data integrity
- Trustless computation/verifiable behavior
Blockchain Oracles
- Crucial to bridge the gap between blockchain networks and external data sources
- They are entities that connect blockchains to external systems
- Enable smart contracts to execute based upon inputs and outputs from the real world
Critical Functions: Oracles with Dapps
- Provides data connectivity, connecting smart contracts within dApps to off-chain data sources.
- Data reliability is maintained, ensuring security in dApp operations.
- Vital for dApps to handle financial transactions or sensitive operations.
- Adds advanced functionality, creating hybrid smart contracts that combine on-chain and off-chain infrastructure
- Allows you to React to real-world events and interact with traditional systems
- Can Access external data without compromising the blockchain's security and decentralization
Oracles Example
- Alice bets $20 on team A and Bob bets $20 on team B
- The $40 total is held in escrow by a smart contract
- When the game ends, an oracle mechanism captures accurate game results off-chain and delivers them to the blockchain in a secure and reliable manner
- When the game ends, the smart contract needs to know whether to release the funds
DAOs (Decentralized Autonomous Organizations)
- Community-led digital organizations
- DAOs don't have central authorities like CEOs, CFOs, or Boards of Directors
- Any member can put forward a proposal for other members to vote to accept or reject
- DAOs run autonomously using smart contracts
- Daos maintain stakeholders for governance
- They can function like an investment club
Advantages: DAOs and Entrepreneurs
- Have Minimal start-up and operations costs
- There are no HR, brick-and-mortar, administrators, middle managers, etc.
- Managed by smart contracts
- Global reach is a feature
- Can sell tokens to investors
- Can raise capital through traditional means like venture capitalists, investment banks, or angel investors
- Wyoming was the first state to recognize DAOs as real businesses, giving them the same legal protection as Limited Liability Corporations
- All Blockchain features are immutable, transparent, and publicly verifiable
DAOs are like cooperatives
- Can focus on bringing every type of value to its members
- They are not owned by shareholders
- No profit-at-all-costs maxims
- Example: Puget Sound Consumer Co-op
DAO Risks
- Hacking has occurred of “TheDao” and resulted in $60 million stolen and $8 million recovered]
- Corporate intellectual property and trade secrets are difficult to protect
- There's Some degree of centralization in practice
Examples of DAOs
- Noise. Music: alternative to Spotify
- BANK : earn coin for writing articles for a podcast
- RedDAO : fashion
- Dream - philanthropy
- Friends with Benefits (FWB): exclusive social club, pay to enter
- MetaCartel Venture DAO: invests in early-stage decentralized applications
dApps: How To
- Set up a Web3 wallet-e.g., Metamask
- Connect your wallet to the dApp
- Initiate the transaction through the dApp's Ul when you want to act.
- Approve the transaction
- Wait for the blockchain to approve and process the transaction
- Monitor your activity
DeFi Topics
- DeFi Protocols
- DeFi Lending
- DeFi Borrowing
- DeFi Staking
- Hacks & Scams
DeFi Protocols Definition
- Specialized autonomous programs designed to address issues in traditional finance by leveraging blockchain technology
- Enable financial services: trading, lending, borrowing, yield farming
- Does not require intermediaries like banks or exchanges
Protocols: Key Components
- Blockchain technology features rely heavily on blockchain for blockchains
- Provides a decentralized and immutable ledger for recording transactions and smart contract data.
- Smart contracts provide programs that automate financial processes based on predefined rules, which eliminates the need for intermediaries.
- Decentralized applications offer interfaces to blockchains to provide financial services.
- Allow users to access services through web or mobile apps without intermediaries.
- Decentralized governance consists of communities that use governance tokens.
- They allow for democratic decision-making and updates.
Protocols Examples
- A decentralized exchange (DEX) that facilitates token swaps using Automated Market-Making (AMM) algorithms is called Uniswap
- AMM algorithms utilize sophisticated mathematical models in DeFi to facilitate trading without traditional order books.
- These algorithms enable creating liquidity pools where users can trade digital assets directly against a pool of funds, not with other traders.
- Aave allows users to borrow cryptocurrencies with variable interest rates.
- Maker issues the stablecoin DAI, collateralized by other cryptocurrencies like Ethereum
- Curve Finance is a liquidity aggregator for stablecoins/pegged assets.
- Liquidity aggregators gather/consolidate liquidity from multiple sources to provide users with the best trading conditions
- Are used across various financial markets, forex, cryptocurrencies, DeFi
DeFi Lending
TRUSTLESS: Offer crypto loans in a trustless manner without intermediaries and allows users to lend coins
- P2P LENDING: A borrower can directly take a loan through the decentralized platform
- Lenders can earn interest
- Defi has the highest lending growth rate among decentralized applications (DApps)
Traditional Loans: Time and Cost
- Time to Process a traditional loan: 2-5 business days
- Time to disperse into individual's account traditional loan: 7-14 days after the initial request
- The cost of a traditional loan: APR of between 5-20% like those of credit cards
- Origination fee (sometimes)
WHY DeFi Lending
-Lenders can use their digital assets as COLLATERAL for a cash or stablecoin loan
- Defi loans enable users to lend their crypto to get interest
- A crypto loan is a way for traders to get liquid funds without selling their cryptocurrency
- Traditionally banks always loaned money deposited in accounts
- In current Defi, now everyone can become a lender
- This happens through lending pools, the loan offices of traditional banks
What is a LENDING POOL
- The most common way is to generate interest on crypto-assets
- Lend out as a decentralized borrowing and lending protocols
- A lending pool is a smart contract
- Allows businesses to build applications such as lending protocols, savings accounts, others
- Acts as a central account where users can deposit funds and use different methods to distribute interest to investors
How do Lending Pools work
- A depositor gets a particular token that can go up or down in value depending on the interest generated
- Tokenization is unique to the DeFi lending space
- A token holds the interest generated on a particular deposit
- By sending that token to a third party, a depositor can share their interest with whoever they choose
- The holder could hold those interest tokens for as long or as little as they like
Traditional Loans
-OPPORTUNITY: The outstanding balance of all consumer loans in the US is over $17.5 trillion (Equifax 11/12/24). Total crypto market cap (~$3T)
- Three types of traditional loans: Secured , Unsecured, Lines of Credit
Traditional Collateral
-Car loan: the car itself
- When the user stops paying the loan, the bank will seize the vehicle
DeFi Lender Model
- Borrowers deposit crypto as collateral before obtaining a loan
- The DeFi Lending platform obtains crypto from the borrower/ lender
- The DeFi Leading platform repays their loan with interest from the lender
- the borrower can receive their collateral from after a payment is done to the platform
- Lenders deposit flat currency
- the fund is used to obtain collateral from the platform
- the Lender will then receives funds back with interest
DeFi Lending Benefits
- Permission Less
- Immutability
- Benefits of DeFi
- Self-Custody
- Programmability
- Interoperability
- Transparency
Borrower Repayment Guarantee
- Lenders holds collateral
- Uses Smart Contract
- Transparency
- Reputation (like AirBnB)
- Risk vs. Interest Rate
DeFi Borrowing (vs. Traditional)
-Liquidity of coins can be done without selling (Coin hodler needs USD for short term purpose (unexpected expense)), - Hodler wants to buy more coin
- Often get lower interest rate
- Broader view of creditworthiness and build digital creditworthiness
- Access to loans outside US, protection of proceeds From loans
- More precise pricing (risk calculation), Funding is faster, Protection of privacy
DeFi Borrowing
- Loan terms can be anywhere from seven days to a year or more, or can last for days -Smart contracts are used to deposit this amount of currency of at least equal value to the loan amount
- Collateral does not involve physical property -Non-collateral loans are unlikely unless high risk, high interest rates and shorter terms is involved
DeFi Borrowing: Collateral
Borrow up to 50% of crypto's value with a lender like Binance or up to 90% with a lender like Youholder.com. -Collaterals are available in wide varieties and token can be used to exchange borrowed cryptocurrency
- If a user needed to borrow one bitcoin, they would need to deposit a price of one in DAI instead , DAI is a stable coin
DeFi Collateral Example
-A user wants to borrow 100 DAI
- MakerDAO requires borrowers to collateralize their loans at a minimum of 150% of the loan value so 150 ETH
- The borrower needs to collateralize the loan with $150 in ETH -If the value of collateral reduces below $150 ETH, it becomes subject to a liquidation penalty
DeFi Risks: BORROWER
- How your collateral is being stored impacts how vulnerable your crypto will be if there’s an issue
- Look for a company that practices company uses cold storage wallets, and has insurance, and past history of hacks by reviewing with it -If you are borrowing so you don't have to sell your crypto to be sure to borrow an amount that will allow you to provide more collateral if needed, for don't borrow too high a percentage of your entire portfolio.
DeFi Research Instructions
- Refer to the list of DeFi applications and concepts, choose one to investigate with your project teams
- Write the topic on the whiteboard and distinguish different topics among teams
- Consolidate information from multiple sources on the topic
- On whiteboard, make notes for a 2-minute presentation, 1. Define, 2. Explain, 3. Apply
DeFi Crypto Staking
-A way to earn financial rewards. Relatively safe investment -It means Act of depositing 32 ETH to activate validator software
Validator Tasks
- Store data
- Process transactions
- Add new blocks
- Keep Ethereum secure for everyone
- Earn new ETH in the process
Crypto Staking
- Crypto investors stake holdings by simply leaving them in their crypto wallet
- This process is known as proof-of-stake (POS)
Historical staking example
- Staking a Claim. Pay for rights to mine for minerals on certain types of public land
How do ETH miners make money?
- The reward of 2 ETH they are paid for mining a block
- From gas fees paid for transactions (paying for computer power)
- The value miners extract by inserting (or not inserting) transactions at specific points in the block
What are the benefits of staking?
- Less risk than DeFi and since the Merge, Ethereum represents a major new opportunity
- Current rewards are between 4% and 5%
How to Stake ETH: 4 ways
- Become a validator. Requires 32 ETH (about $50k)
- Locked up indefinitely and requires computer running Linux OS Staking as a Service: Requires 32 ETH. Pay to use computer service (like SaaS)
- Use an exchange.
- Pooled staking. ETH holders pool to stake the 32 ETH. Many advantages.
How to Stake crypto
-Choose what coin to stake, then Learn the minimum stacking requirements (ETH needs a value of 32)
- Download software wallet for the desired coin. Choose and download and store coins for stacking
- Find the right hardware such as a reliable computer to perform the task
- Begin staking your coin by Tip: staking coins tokens of Tezos and of Cosmos can be stalled automatically through Coinbase
Popular crypto staking coins
- Ethereum (ETH)
- EOS is similar to Ethereum that's used to support decentralized programs and is a native token
- Tezos (XTZ.), an open-source blockchain network with own native currency
- Cosmos (ATOM) is the "internet of blockchains"and bringing each other together
- Cardano (ADA), smart contract platform like Etherium and its a multil-layered platform
- One layer for the transaction of the ADA coin and the other for development
- All coins uses scientifically tested theories based on other proven research
- Polkadot (DOT) a newer coin created 2020, a similar to Cosmos
- Has interoperability and is designed to support parachains or block chains
Yield Farming
-A strategy used in decentralized finance (DeFi) to maximize returns on cryptocurrency holdings by providing liquidity -Known for liquidity mining
- depositing cryptocurrency assets into liquidity pools or lending protocols to earn rewards
- Rewards include transaction fees, governance tokens, or additional cryptocurrencies The process is facilitated by smart contracts and automated market makers (AMMs) : Uniswap or SushiSwap enabling decentralized trading without traditional order books
Yield Farming Components
- Assets used for yield farming, such as Ethereum or stablecoins that are cryptocurrency
- Liquidity Pools, Smart contracts that hold funds to facilitate token swaps and lending.
- Tokens received by liquidity providers represent their share of the pool.
- Smart Contracts, Automate the distribution of rewards and management of liquidity pools
General Strategy
- Select a Platform: Choose a DeFi platform like Curve or Compound.
- Provide Liquidity: Deposit a pair of tokens into a liquidity pool.
- Receive LP Tokens: Get tokens representing your share of the pool. Stake LP Tokens: Use tokens to earn additional rewards on other platforms and Claim Rewards.
- Periodically withdraw your earnings or reinvest
Yield Farming
Offers a passive income and potential high yields Includes impermanent loss, smart contract vulnerabilities, and market volatility -Benefits vs Risk
DeFi Hacks and Scams
- The Crypto community have found crypto hacking as a looting method
- $3.8B in stolen crypto in the past year via decentralizing exchanges
- Types of DeFi scams are as follows Cross-Chain Bridge scam (where assets are stolen between Blockchains), staking pools scam, as well as exchange and phishing attacks
- A decrease in scam cryptocurrency scams has fallen a massive 77% since $2023
- Scams have risen to 62.4% since last half of the year due to the increased revenue of the market
DeFi: Protecting Yourself
Verify the team's credibility on other projects and read the white paper -Check that everything has been audited by another party
- Also, be alerted by any flags of market volatility
Scams list
- Be more alert and aware on new coin projects for rug pulls
- Avoid ineffective schemes such as honeypot
- More importantly on phony NFTs that sell large sums of money online
Ways to protect Yourself
- Investigate the community, use strong passwords always
- Investigate any security measures such as two-factor authentication for example -Use external hardware wallets on devices you trust that you can store your private keys
Warning signs of cryptocurrency scams
- Promises of free money and/or vague details about where your investment funds are going is most popular
- A third party unknown will share a cryptocurrency investment too being too good to be true -Take care of the words, avoid influencers that promote cryptos
Safe measures to do in cryptocurrency
- Pay with Cryptocurrency, don't feel pressured to sign quickly
- Do not click any suspicious links or text or be aware of storing your funds in a good wallet
On DeFi
Its is not just technology, but a fundamental vision towards finance -Decentralization with transparency as well for potential systems
- However, Defi has significant risks that should be looked at carefully
Summary
Eliminates:
- intermediaries
- Transparency and immutability
- Accessibility: Anyone with an internet connector
- Transactions are executed quickly and automatically thanks to smart contracts
Emerging Trends In Cryptocurrency
- Focus on Safety and yield as well
- Growth of stable coins that can improve activities
- Tradional fiancs will come together as technology becomes more popular
Crypto Analytics
DYOR: TRUSTED RESOURCES
- Use Blockchain when searching for data and be on the lookout in websites like coinDesk
- Read websites like decrypt news and Etherium.org for breaking news
- Take courses on blockchains, news sites like CoinMarketCap
- Business wire will also be provided with news as well as new you tube channels for videos
Web Resources
- Youtube is also a great resource to go over topics and concept
- Andreas helps go over excellent explanations as to why things work
- Coinbureau vides as well as whitboard and 99 bitcoins
Tools to assist new investors
- coinmarketCap is also useful and it helps organize analytics
- It also has top community post and measures the greeds and fears of investor actions -These resources will have news and updates through telagram
Total Value Locked
There will be a metric in the cryptocurrency and finance space for decratilization and immutabilty
- It will serve as an indicator for growth of the company and make up potential benefits.
TVL AND DECISIONS
Be on the lookout for indicators that go into security and read the platform for reliability
TVL vs. Market Cap
- TVL measures the worth of assets locked inside the protocol or platform
- The formula, Market Cap = the value of a cryptocurrency's circulating supply,
- multiplied using the current price vs number of coins in circulation
- A project can have high TVL but low market cap vice versa (ratio
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