Token approvals in DeFi: what you sign and why
A token approval lets a DeFi app spend a token from your wallet, but it does not move the tokens by itself. You can review and revoke it later.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
On this page
- Smart contracts need on-chain permission to move your tokens.
- An approval records an allowance for one token.
- Wallets and block explorers list approvals you can revoke.
A token approval in DeFi sits between connecting your wallet and trading. The app asks for permission to spend one token, and the pop-up shows a spender address and an amount. You sign an on-chain transaction, and the contract records an allowance. Connecting a wallet is not an approval.
How does a token approval work?
Smart contracts cannot move tokens out of your wallet on their own. They need on-chain permission, and an approval gives one contract an allowance for one token. The approval only grants permission. A swap or deposit you confirm later moves the tokens.
How do you review and revoke approvals?
You can review approvals in your wallet and in a block explorer. Many wallets list each spender and token on an approvals screen. A block explorer shows the allowance for a wallet address. Revoking sends a new transaction that sets the allowance to zero.
What are the risks of token approvals?
An unlimited approval lets a contract spend that token until you revoke it. If the contract is malicious or later gets hacked, it can use an old approval to move tokens from your wallet. The risk stays while the allowance is active.
Frequently asked questions
Usually no. An approval stays until you revoke it or the allowance is used up. Some apps ask again if you change the amount.
Yes. You can change or revoke an approval in your wallet or a block explorer. Revoking does not reverse past transfers or recover tokens already moved.
The wallet or explorer often labels it unlimited or shows a maximum amount. Check the amount before you sign.
