In DeFi, one of the most popular, yet also most confusing, aspects users find themselves dealing with when working on DeFi platforms is actually related to Infinite Approvals. Starting from swapping tokens, staking, farming, or even adding or removing liquidity, all users are asked to permit smart contracts endless times. The question is, therefore, how come DeFi applications utilize endless approvals so frequently, as well as what it all concludes when it comes to security and convenience.
This article provides a detailed explanation of infinite approvals and will shed light on what infinite approvals are and how they work, the reasons behind them and the associated risks and benefits, and tips and best practices regarding infinite approvals for users of the DeFi space.
What is Infinite Approval in De-Fi?
Infinite approvals are a type of permission given by a user to a smart contract. This permission enables a smart contract to spend as much of a particular token as it wants from the user's wallet. Users do not have to give the smart contract a specific amount of token approval for every transaction. This permission is given by the user to the smart contract, and access is given to the contract until the user revokes it.
The majority of DeFi tokens were based on the ERC-20 standard and had an approval system in place. The approval system allows for the transfer of tokens using smart contracts. The case where the approved amount is set to its highest possible amount is generally considered infinite or unlimited approval.
Why are Infinite Approvals Common in DeFi Protocols?
Infinite approvals have become so popular due to their reliance on the way that DeFi apps are designed to work efficiently and quickly.
1. Less Transaction Friction
This implies that users would have to approve the tokens before any interaction, and infinite approvals provide an efficient and seamless experience by eliminating these unnecessary steps. This makes the DeFi experience seamless by reducing the associated delays and costs.
2. Lower Gas Costs over Time
Every approval for a token is a transaction on the blockchain that costs gas. By granting unlimited access for the initial approval, the users do not incur gas costs afterwards. This can benefit networks with variable or potentially high costs for sending transactions.
3. Support for Automated DeFi Strategies
DeFi services rely to a large extent upon automation in the following:
Yield farming and auto-compounding
Liquidity pool rebalancing
Trading Bots and Vault Strategies
Infinite approvals make possible the automation of actions by smart contracts, which is necessary for these contracts to work in their usual, intended manner.
4. Industry Standardization
Over the years, the concept of infinite approvals has become the norm within the DeFi sector. This is because the wallets' interfaces and other DeFi protocol interfaces rely on unlimited permissions.
How Infinite Approvals Work at a Smart-Contract Level
From a technical perspective, an infinite number of approvals is made possible through the token allowance map that is stored on the blockchain directly. When a user approves a smart contract, its allowable number of transactions that can be done on behalf of a user is recorded on the blockchain.
With Infinite Approvals:
The allowance is set to the highest value that the token standard allows.
The smart contract does not require repeated approval for any subsequent interactions.
Permissions are still in effect even if the person stops using the protocol or even if they forget the permission was granted.
The ongoing access enables seamless and automated function in the DeFi systems, but this characteristic introduces long-term exposure. As the initial enhancement addresses efficiency and convenience, it could become the fundamental vulnerability if the contract approved has been breached.
Security Aspects of Infinite Approvals
Although infinite approvals increase convenience, they simultaneously extend a user’s risk of smart contract risk as they gain extended access to funds even beyond a single transaction.
Critical Security Concerns
Smart contract vulnerabilities:
In the case of a bug or vulnerability present in the contract itself, the attackers would be able to take full advantage of the infinite permissions given by the infinite approvals and possibly have access to a higher number of tokens than the users actually intended.
Protocol compromise:
Even audited or sound contracts can be “hacked” or “maliciously upgraded.” Infinite approvals can potentially allow malicious contracts to use users’ funds without additional approval.
Forgotten Approvals:
The user forgets the existing approvals from months or even years ago, especially when the approvals are no longer applicable to the protocols the user is no longer using.
It’s worth noting that it’s not the infinite approvals that lead to hacks, but they do provide the potential for an exploit to cause more harm in terms of accessing more tokens than usual in cases when a contract has been breached.
Infinite Approvals and DeFi Hacks
In several high-profile DeFi security incidents, attackers were able to drain user funds because infinite approvals had already been granted to compromised contracts. While infinite approvals are not the root cause of these exploits, they often amplified the impact by allowing attackers to access more tokens than a single transaction would permit.
Notable examples include:
BadgerDAO Frontend Exploit (2021)
Attackers injected malicious scripts into the BadgerDAO frontend, tricking users into approving malicious contracts. Because many users had granted infinite approvals, the attacker was able to drain funds directly from wallets without further interaction.Rari Capital / Fei Protocol Exploit (2022)
A vulnerability in a smart contract allowed attackers to withdraw assets from user-approved pools. Infinite approvals meant that once the contract was compromised, larger balances were exposed.Wintermute’s Approval-Related Exploit (2022)
In this case, compromised private keys combined with token allowances enabled attackers to move approved funds quickly across contracts.
These incidents highlight a recurring pattern:
Losses extended beyond users’ most recent transactions
Dormant wallets with old approvals were affected
Attackers were able to use all approved tokens, not just a limited amount
It is important to note that infinite approvals do not cause exploits by themselves. However, when a protocol is compromised—through a smart contract bug, frontend attack, or malicious upgrade—unrestricted allowances can significantly increase the scale of losses.
This is why infinite approvals are frequently discussed within DeFi security research and why approval management is considered a critical aspect of user safety.
Convenience vs Security: Understanding the Trade-Off
This popularity of infinite approvals also embodies the balance between ease-of-use and security.
Advantages of Infinite Approvals
Faster Transactions
Less wallet confirmations
Decrease in gas prices with time
Seamless Interaction with DeFi protocols
Disadvantages of Infinite Approvals
Long-term risk of smart contracts
Increased potential losses during the exploit
Handling permissions by hand