Module C – Interactive Quiz – 20 Multiple-Choice Questions
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Q1Understand
What does “non-fungible” mean in the context of NFTs?
Explanation
Non-fungible means each token is unique; unlike ETH, no two units are identical.
Q2Understand
What does an NFT actually store on the blockchain?
Explanation
NFTs store only the token ID, owner, and a pointer (tokenURI); media lives off-chain.
Q3Understand
What is the key difference between ERC-721 and ERC-1155?
Explanation
ERC-1155 is a multi-token standard; ERC-721 handles only unique tokens.
Q4Understand
What is the purpose of tokenURI in an NFT contract?
Explanation
tokenURI returns a URI (typically IPFS or HTTP) pointing to a JSON description.
Q5Apply
An NFT’s image is stored on a centralized server that goes permanently offline. What happens?
Explanation
Ownership record stays on-chain, but the media it points to becomes inaccessible.
Q6Apply
How does IPFS content addressing differ from traditional URL addressing?
Explanation
IPFS CIDs are derived from the file’s hash, so the same content always has the same address.
Q7Apply
In an English auction for an NFT, what determines the outcome?
Explanation
English auctions start low and escalate; the highest bid at closing wins.
Q8Apply
A collection mints 10,000 NFTs at 0.08 ETH each. What is the total mint revenue?
Explanation
10,000 × 0.08 = 800 ETH total mint revenue.
Q9Apply
A creator sets 5% royalties. After Blur makes royalties optional, what happens to creator income?
Explanation
Marketplace competition eliminated royalty enforcement; creators lose income even with ERC-2981 set.
Q10Apply
Axie Infinity’s SLP token dropped from $0.39 to $0.003. What is the approximate percentage loss?
Explanation
(0.39 - 0.003) / 0.39 ≈ 0.992, i.e. a 99.2% decline.
Q11Apply
CryptoPunks have a floor price of 50 ETH at $2,500/ETH. With 10,000 Punks, what is the minimum collection value?
Explanation
10,000 × 50 × \2,500 = $1,250,000,000$.
Q12Apply
A tokenized Treasury fund holds $1M in tokens paying 5% annual yield. What is the quarterly payment?
Explanation
\1,000,000 × 0.05 / 4 = $12,500$ per quarter.
Q13Analyze
Why did creator royalty enforcement collapse in 2022–2023?
Explanation
Blur gained share with zero-royalty trading; OpenSea followed to compete, destroying the voluntary enforcement norm.
Q14Analyze
What structural flaw caused Axie Infinity’s play-to-earn economic collapse?
Explanation
P2E models funded by new-player entry rather than real value creation are structurally unsustainable.
Q15Analyze
Why is on-chain storage more permanent but less practical than IPFS for NFT images?
Explanation
Ethereum storage costs ≈\!\20,000–$40,000$ per MB, making full image storage impractical.
Q16Analyze
Why are institutions tokenizing Treasury bills before real estate?
Explanation
Treasuries are simpler to structure legally with well-understood regulatory treatment, reducing compliance risk.
Q17Analyze
NFT trading volume crashed 90% from its 2022 peak. Does this mean NFT technology failed?
Explanation
The speculative bubble burst, but NFT infrastructure expanded into RWA tokenization and digital identity.
Q18Analyze
If an NFT points to metadata on IPFS and no one pins it, what is the long-term outcome?
Explanation
Unpinned IPFS content is eventually garbage-collected, leaving the token orphaned.
Q19Evaluate
A new NFT project promises 20% APY from resale royalties, has an anonymous team, and stores metadata on a personal server. Is this a sound investment?
Explanation
Centralized storage risks loss, anonymous team risks rug pull, royalty-based yield is unsustainable given marketplace competition.
Q20Evaluate
A company tokenizes commercial real estate. Token holders receive fractional rental income but no legal equity stake. Should regulators classify this as a security?
Explanation
Investors commit capital expecting profits from the property manager’s efforts, satisfying all four Howey prongs.