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DeFi Education5 min read

Token Approvals: What They Are and Why You Should Manage Them

Every DeFi interaction starts with an approval. Learn how they work, the risks of unlimited approvals, and how to revoke them.

What Is a Token Approval?

Before a smart contract can spend your tokens, you must approve it. This is an on-chain transaction that grants permission for a specific contract to move a specific amount of your tokens.

Unlimited vs Limited Approvals

  • Unlimited approval: Contract can spend any amount of your tokens forever
  • Limited approval: Contract can only spend the exact amount needed
Most DeFi protocols request unlimited approvals for convenience — you do not need to approve again for future transactions. But this creates risk.

The Risk

If an approved contract is exploited (hacked, has a bug, or turns malicious), the attacker can drain all tokens you have approved. This has happened in multiple DeFi exploits.

Best Practices

  • Use limited approvals when possible: Some wallets let you set a custom amount
  • Revoke unused approvals: Clean up approvals for protocols you no longer use
  • Review before approving: Check which contract is requesting access
  • Use approval management tools: Revoke.cash, Etherscan token approvals page
  • Consider approval-less swaps: Permit2 (Uniswap) and EIP-2612 enable single-transaction approve-and-swap

    • How to Revoke Approvals

  • Go to revoke.cash or etherscan.io/tokenapprovalchecker
  • Connect your wallet
  • Review all active approvals
  • Revoke any approvals for protocols you do not actively use
  • Each revocation is a transaction (costs gas)

    • Alkizen and Approvals

    Alkizen uses standard token approvals for swap execution. When possible, Relay leverages Permit2 for streamlined approval flows, reducing the number of transactions you need to sign.

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