Q1. What are the two native tokens of the Liquid Loans protocol?

A. USDL and ETH

B. USDL and LEND

C. LOAN and ETH

D. USDL and LOAN

Q2. When you collateralize ETH, you place your coins in a:

A. Trove

B. Vault

C. Safe

D. Bank

Q3. The price of USDL is pegged via multiple mechanisms to:

A. One physical US dollar

B. One US dollar worth of ETH

C. One US dollar worth of LOAN

D. One US dollar worth of gold

Q4. What is the Minimum Collateral Ratio required to open a Vault?

A. 95%

B. 100%

C. 110%

D. 150%

Q5. What happens to the crypto that you collateralize to take a LOAN?

A. It gets sent to ABC Research, where they create great software products from which you can expect future profit

B. It gets sent to the ETH Burn Address

C. It sits in a secure smart contract, where it will remain locked until the debt is repaid

D. Gary gets half, Alex gets the other half, Sam gets nothing

Q6. What determines the price of USDL on decentralized exchanges?

A. The peg mechanisms inherent to the Liquid Loans protocol

B. Direct USDL to ETH redemptions

C. The recognition from centralized exchanges and off-ramps that 1 USDL equals 1 USD

D. Natural price movements from buying and selling USDL through liquidity pools

Q7. What is the primary oracle that provides price feeds for Liquid Loans on Base?

A. Fetch on Ethereum

B. Chainlink on Base

C. Band Protocol

D. Wall Street

Q8. What function assures that USDL is fully-backed?

A. Maintenance of more ETH value across the Vaults than USDL value borrowed

B. More USD held by Liquid Loans in reserves than USDL borrowed

C. Maintenance of more LOAN token value in the Vaults than USDL value borrowed

D. Maintenance of more ETH value in the USDL:ETH pool than USDL value borrowed

Q9. What is the function of the LOAN token?

A. To be a fully-backed, decentralized stablecoin

B. To gather yield in the Stability Pool

C. To capture the fees of the protocol

D. To collateralize USDL

Q10. Who are the “owners” of the Liquid Loans protocol?

A. Anybody who stakes the LOAN token

B. The Liquid Loans Team

C. Whoever holds the most LOAN token

D. Whoever has the largest Vault

Q11. How much interest do borrowers pay on their loan?

A. 0% interest per year

B. 2.5% interest per year

C. 50% interest per year

D. 0.5% interest for every loan created

Q12. What is the motivation behind the Liquid Loans protocol?

A. To launch memecoins

B. To give crypto holders a real way to extract value from their coins WITHOUT selling

C. To generate revenue for the business, who worked really hard to create a lending platform on Base

D. To generate a fully-backed, truly decentralized stablecoin which can generate yield from the fees of the protocol

Q13. What tokens can you collateralize to take a loan on Base?

A. LOAN and ETH

B. Any ERC-20

C. ETH and AAVE

D. Only ETH

Q14. Who controls the future direction of the protocol?

A. Nobody, it is governance-free

B. Whoever votes the most in the DAO using the LOAN token

C. Whoever has the most valuable Vault

D. The Liquid Loans team

Q15. Who audited the protocols’ code?

A. Halborn

B. Certik

C. Trail Of Bits

D. There was no audit

Q16. Which action can you not perform solely inside the Liquid Loans protocol?

A. Borrow USDL

B. Redeem USDL for ETH

C. Arbitrage USDL

D. Earn LOAN

Q17. What do you NOT NEED to borrow USDL?

A. ETH

B. A self-custody wallet

C. A Liquid Loans account

D. You need all of these

Q18. What is the one-time borrowing fee?

A. There is no borrowing fee

B. 0.5%-5% of the ETH you collateralize

C. 0.5%-5% of the USDL you mint

D. 0.5%-5% equally between the ETH and USDL

Q19. Who earns the borrowing and redemption fees?

A. Stability Providers

B. LOAN token stakers

C. The Liquid Loans team

D. It's spread proportionately across the Vaults

Q20. What influences the redemption and borrowing fee rates?

A. Redemption volume

B. Borrowing volume

C. The amount of USDL in the Stability Pool

D. Stability Pool APR

Q21. Which functions will NOT result in losing value using Liquid Loans?

A. Getting liquidated

B. Getting redeemed against

C. You are a Stability Provider and Vaults under the minimum collateral ratio are liquidated

D. You redeem USDL that you bought between $0.995 and $1

Q22. When do you have to pay back your debt?

A. After the initial 42 day period

B. After 1 year

C. There are weekly payments, like a traditional loan

D. Whenever you want; there is no repayment schedule

Q23. How much is the Liquidation Reserve?

A. There is no Liquidation Reserve

B. $50 worth of ETH

C. 50 USDL

D. 200 USDL

Q24. What does NOT influence your Vaults’ collateral ratio?

A. The price feed data

B. The amount of ETH in your vault

C. The amount of USDL borrowed

D. If you buy a rugpull with your borrowed USDL

Q25. What is the MINIMUM collateral ratio should you maintain to avoid liquidation during recovery mode?

A. 110%

B. 150%

C. 200%

D. 250%

Q26. What happens when your Vault is liquidated?

A. You keep your borrowed USDL but lose your ETH

B. You keep your ETH but lose your borrowed USDL

C. The Stability Providers take your USDL

D. The LOAN token stakers take your ETH

Q27. Who gets your Liquidation Reserve upon liquidation?

A. The Loan Token stakers

B. The Stability providers

C. The liquidator

D. You keep your Liquidation Reserve

Q28. What happens if your Vault gets fully redeemed?

A. You keep your ETH, but lose your borrowed USDL

B. You keep your borrowed USDL, but lose your ETH

C. You keep your borrowed USDL and ETH collateral surplus, but lose your the rest of your ETH

D. You keep your USDL, but your ETH gets distributed to the Stability Pool

Q29. What function makes Liquid Loans so capital efficient?

A. Smart and timely management from the team

B. Instantaneous liquidations

C. The use of the LOAN token as backup collateral

D. The ability to use multiple tokens as collateral

Q30. What happens if the Stability Pool is empty?

A. The debt and ETH of liquidated vaults are distributed amongst all of the other vaults

B. The debt and ETH of liquidated vaults are distributed amongst the LOAN Staking Pool

C. More USDL is minted to cover the empty stability pool

D. Vaults cannot be liquidated, and all USDL debt from liquidated vaults is forgiven (think Student Loan Bailout)

Q31. How does the Stability Pool earn yield?

A. By gaining more ETH value than the USDL debt they cancel out

B. By earning LOAN token on an emission schedule

C. By earning the borrowing and redemption fees

D. A and B

Q32. What does the liquidator get for their services?

A. The Liquidation Reserve

B. 0.5% of the liquidated vaults collateral

C. A solvent, decentralized-lending protocol

D. All of the above

Q33. How are early adopters rewarded?

A. Increased LOAN token emissions in the Stability Pool

B. Lower borrowing and redemption fees

C. Lower minimum collateral requirements

D. Increased yield in the LOAN Staking Pool

Q34. When can you withdraw your USDL from the Stability Pool?

A. At any time

B. When there isn't a liquidatable vault

C. After the 14 day minimum lock period

D. After the 42 day minimum lock period

Q35. How can you BEST avoid your vault being redeemed against?

A. Be the lowest collateralized vault

B. Be a Stability Provider

C. Be the highest collateralized vault

D. Be in good standing with the community of redeemers

Q36. When can you withdraw your staked LOAN token?

A. At any time

B. Any time there is not a liquidatable Vaults

C. Only after a 14 day lock-up period

D. Only after the first 42 day lock-up period

Q37. How much will my staked LOAN earn?

A. 11% APR

B. 21.99% APR

C. 43% APR

D. Nobody knows

Q38. At what Total Collateral Ratio does Recovery Mode initiate?

A. Below 100% TCR

B. Below 110% TCR

C. Below 120% TCR

D. Below 150% TCR

Q39. What is NOT a function of recovery mode?

A. To incentivize USDL holders to replenish the Stability Pool

B. To incentivize borrowers to behave in ways which raise the TCR

C. To incentivize borrowers to borrow more USDL while improving their ICR

D. To incentivize users to generate more collateral for USDL

Q40. In Recovery Mode, if a borrower is liquidated at 149% ICR, they lose all of their ETH but keep their borrowed USDL.

A. True

B. False

Q41. You can adjust your Vault in a way that reduces its’ ICR, but only if the resulting TCR is above 150%.

A. True

B. False

Q42. In Recovery Mode, it is possible to:

A. Increase debt of existing vaults

B. Create a new vault with an ICR of 140%

C. Withdraw USDL from the Stability Pool

D. Retrieve collateral from existing vaults

Q43. In Recovery Mode, Vaults under 100% ICR have both their ETH and USDL debt redistributed across the entire network of existing Vaults.

A. True

B. False

Q45. After how many days do USDL redemptions activate?

A. 0 days, they are active upon launch

B. 7 days

C. 14 days

D. 42 days

Q46. Assuming no gas fee and normal redemption fee, what is the highest average cost basis you need to turn a profit, arbitraging USDL via redemptions?

A. Anything under 1 USD

B. Anything under 99.5 cents

C. Anything under 99 cents

D. Anything under 95 cents

Q47. What function does NOT help peg 1 USDL to 1 USD?

A. Redemptions

B. Market expectations (Schelling Point)

C. Assurance from the team

D. Overcollateralization

Q48. In the context of the Liquid Loans protocol, what does “community-owned” mean?

A. The community of LOAN token stakers determine what changes are made to the protocol via a voting process

B. The community of LOAN token stakers own the fees generated by the protocol

C. The community of USDL stakers determine what changes are made to the protocol via a voting process

D. The community of USDL stakers own the fees generated by the protocol

Q49. Centralized exchange listings of USDL are a key peg mechanism of the stablecoin.

A. True

B. False

Q50. To find free educational and inspirational crypto content powered by Liquid Loans, you should go to:

A. Your nearest library

B. The local bowling alley

C. ChatGPT

D. TheCoinZone.com