Definition
A token approval is a permission recorded or recognized by a token system that allows another address or contract to act on a holder’s tokens. On Ethereum-style ERC-20 tokens, an allowance commonly specifies how much a spender may transfer. NFT standards can authorize an individual token or an operator for a collection. These permissions differ from merely connecting a wallet to a website.
How It Works
Decentralized exchanges and other applications use approvals because their contracts need to move assets during operations such as swaps or deposits. An approval transaction usually establishes the permission; a later transaction uses it. Some systems support signed permits or delegated approval mechanisms instead of a separate initial on-chain approval. The precise scope, expiration, and revocation process depend on the standard and implementation.
Key Considerations
Check the token, network, spender address, and permitted amount before signing. An unlimited allowance can expose future balances of that token while it remains active, especially if the spender is malicious or compromised. An approval normally does not hand over the wallet’s private key or authorize every unrelated asset. Disconnecting a website does not generally remove on-chain permissions. Review unused allowances and revoke or reduce them using trusted interfaces; revocation takes effect according to network confirmation and cannot recover already transferred funds.