DefineDeFiWeb3 Glossary

Token Approval

Permission you give a smart contract to spend your tokens. Required before using most DeFi apps, but can be risky if given to scams.

Example

Approving Uniswap to access your USDC before you can swap it. Unlimited approvals are convenient but riskier than limited ones.

Related Terms

Advanced Concepts
Token Approval FlowShows how token approvals work and why revoking mattersToken Approval: Giving PermissionYour WalletUSDCETHUNIAPPROVE1DApp Contract(e.g., Uniswap)Has Permissionto spend USDCSPEND2Trade CompleteYou get new tokensDAI⚠️ The RiskUnlimited approvals stay active foreverIf the contract is hacked or malicious,it can drain your tokens anytime!✓ Best Practice: RevokeAfter using a DApp, revoke approvalTools: Revoke.cash, Etherscan🔒 Revoke Permission

⚙️How It Works

  1. 1

    Approval Request

    DApp asks permission to spend a specific token from your wallet

  2. 2

    You Approve

    You sign a transaction granting the contract permission (unlimited or limited amount)

  3. 3

    Contract Access

    The contract can now move that token from your wallet without further approval

  4. 4

    Revoke (Optional)

    You can revoke approval anytime to remove the contract's access

⚠️Risks & Warnings

  • •Unlimited approvals remain active forever - even after you're done using the app
  • •If the approved contract is hacked, attackers can drain your approved tokens
  • •Malicious contracts can steal tokens immediately after you approve
  • •Many users forget about old approvals, leaving tokens at risk

🚀Getting Started

  • 1Check your current approvals at revoke.cash or etherscan.io/tokenapprovalchecker
  • 2Revoke approvals for contracts you no longer use
  • 3When possible, approve only the exact amount needed for your transaction
  • 4Be extra careful approving tokens on unfamiliar or unaudited contracts
  • 5Consider using a separate wallet for risky interactions
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