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Token Approval & Allowance Risks

Granting token approvals gives contracts permission to move your ERC-20 tokens. Unlimited allowances pose major security risks.

Unlimited Approvals​

Wallets often default to “infinite” token approvals (2^256-1).
If a malicious or compromised contract holds an unlimited allowance, it can drain your entire token balance at any time.

How Scams Exploit Allowances​

  1. Ice Phishing
    Scammers send a fake token and trick you into approving it; the malicious contract then drains your real tokens.
  2. Fake Airdrops
    You “claim” free tokens and unknowingly grant a scam contract infinite approval, enabling fund theft.

Best Practices​

  1. Limit Allowance
    Approve only the exact amount needed for your transaction, not unlimited.
  2. Review & Revoke
    Regularly audit and revoke old allowances using tools like Revoke.cash or Etherscan’s Token Approval Checker.
  3. Use Separate Wallets
    Keep a hot wallet with minimal funds for DeFi interactions; store larger balances in a separate, more secure wallet.

Tools for Managing Approvals​

  • Revoke.cash — Easily review and revoke token allowances.
  • Etherscan Approval Checker — Built-in feature to manage your ERC-20 approvals.
  • Rabby Wallet — Shows detailed allowance info before you sign a transaction.

Next Steps​

Now that you understand token approval risks, test your knowledge in the Quiz: Scam Prevention.