What is an approval transaction?
Last modified:
An approval transaction grants a smart contract permission to move a specific token on your behalf. On EVM chains, this is the ERC-20 approve() function — and it must be executed before the contract can include that token in a swap, liquidity deposit, or any other operation.
Why it exists
Blockchain wallets do not let third-party contracts withdraw tokens at will. The approval step puts the user in explicit control: you decide which token, which contract, and how much the contract is allowed to spend.
The first time you swap a given token through the CenturionDEX Protocol, your wallet will prompt you to sign an approval transaction. Subsequent swaps of the same token reuse that approval, so no additional approval is needed unless the allowance is exhausted or revoked.
How it works
- You initiate a swap or liquidity action.
- The protocol checks whether it already has a sufficient allowance for the input token.
- If not, your wallet prompts an approval transaction. This is a separate on-chain transaction with its own network cost.
- Once confirmed, the protocol can transfer up to the approved amount.
Security considerations
- Review the spender address. Approvals granted to a malicious contract expose your tokens. Only approve contracts you trust.
- Consider the amount. Some interfaces default to an unlimited allowance for convenience. You can instead set a specific cap equal to the amount you plan to use.
- Revoke unused approvals. Tools like Revoke.cash let you audit and revoke outstanding allowances for contracts you no longer use.
Approval vs. signature permit
An approval is an on-chain transaction that costs gas. A signature permit achieves a similar result through an off-chain signature, avoiding the extra transaction fee — but not all tokens support it.