Infinite Approval In Crypto: The Hidden Risk Behind Convenience

In the world of DeFi and Web3 applications, infinite approval has quietly become one of the biggest and most important crypto security risks. While most users understand fears like phishing, theft of private keys, malware, and other exchange hacks, infinite token allowance represents one of those hidden vulnerabilities that can completely drain wallets without users' knowledge of how the attack occurred. Infinite approval is granting a decentralized application limitless permission to spend a specific token in your wallet-a permission many users give inadvertently for convenience.

This article deep dives into what infinite approval means, why it exists, how attackers exploit it, the risks involved, how to check and revoke approvals, and what security practices every crypto user must follow.

What is Infinite Approval in Crypto?

Infinite approval, commonly known as unlimited token allowance, is a setting wherein a user allows a smart contract to spend an unlimited amount of a certain token from the wallet.

This occurs mainly in ERC-20 tokens and other token standards across chains like Ethereum, BNB Chain, Polygon, Avalanche, Arbitrum, Optimism, and many others.

Why Infinite Approval Exists

Most dApps request token approval for users to:

• Swap tokens on a decentralized exchange

• Provide liquidity

• Stake or farm tokens

• Lending platforms

• Participate in DeFi protocols

By default, many of these applications request unlimited spending authority in order to avoid repetitive approval transactions.

How It Works Technically

• ERC-20 token contracts have a function called approve.

• This allows a user to allow another address-usually a smart contract-to spend their tokens.

• dApps often auto-set this to a huge number, for example, 2^256 – 1, also known as an infinite-integer value.

This means that, theoretically, the smart contract is able to withdraw all tokens of that type from the wallet of the user at any time the contract logic allows.

Why Infinite Approval Became the Standard

Infinite approval has caused millions of dollars in preventable losses for both new users and experienced traders alike, spanning multiple blockchain networks. Countless DeFi hacks, protocol exploits, and malicious smart contracts over the past years have leveraged excessive token allowances to drain user funds with very little resistance.

Infinite approval has resulted in losses involving:

• Stolen USDC, usually directly siphoned from users' wallets when a malicious contract or an exploited dApp had access.

• Drained USDT is among the most targeted stablecoins due to its extensive use and high liquidity.

• Complete token balances wiped overnight, leaving users bewildered because their wallets remained intact and their private keys never leaked.

These incidents show that infinite approval is neither a hypothetical nor a rare case; it is among the most actively exploited and consistently abused attack vectors in the DeFi ecosystem. Attackers target approvals because they completely bypass wallet signatures, turning them into a powerful method for draining funds silently on a large scale.

Infinite Approval Became the Standard

Convenience to Users

Without infinite approval, the processes that users would have to go through in interacting with DeFi platforms would be a bit more time-consuming and repetitive. Since each on-chain interaction involving tokens requires explicit permission, this means the user is forced to:

• Approve every swap individually, even if they are swapping the same token repeatedly.

• Approve each time they interact with a liquidity pool - adding liquidity, removing liquidity, or adjusting their position.

• Pay for multiple transaction fees, as each approval costs gas and therefore adds up in sum on networks such as Ethereum.

For example:

Suppose that you want to execute a trade of USDT to ETH five times; this would require signing an approval transaction five separate times. Every subsequent approval not only slows you down but makes trading more expensive because of repeated gas fees. Infinite approval offers a one-time authorization for speed and convenience in the entire process, especially for frequent traders.

Convenience for dApps

Decentralized applications also prefer infinite approval for the fact that it simplifies their user experience and ensures smooth functionality. They benefit in that:

• It reduces friction to allow users to transact immediately without signing extra steps.

• It eliminates repeated approval prompts that usually bug or puzzle the users.

• It increases user engagement because fewer steps imply more seamless transactions and higher retention.

• It saves on operational costs, since a platform does not have to lead users through complicated approval workflows.

Most dApps want the interaction to feel as close to "one-click trading" as possible, so infinite approval helps them achieve that.

Blockchain UX Prioritization

From Ethereum's early days into DeFi, speed, efficiency, and a frictionless experience have been at the heart of the industry. It has also promoted the idea that reducing superfluous steps for users is critical to increasing adoption and giving decentralized platforms a fighting chance against centralized alternatives.

The inevitable consequence was that infinite approval became the silent default of many DeFi platforms, NFT marketplaces, staking protocols, and token bridges. It didn't seem so harmful at the time, since most users were interacting with applications they knew well and trusted.

But this convenience-first approach overlooked one important detail:

Unlimited allowances introduce long-term security exposures that last even after a user stops using the platform.

It wasn't until a number of high-profile hacks and smart contract exploits later that the industry came to realize how deeply dangerous these inherited allowances were. The same design choice made to bolster convenience ultimately opened the door to some of the most damaging attacks in Web3 history.

The Hidden Dangers of Unlimited Approval

Infinite approval is like giving a stranger a blank cheque that they can cash anytime.

How Attackers Exploit It

Attackers can leverage infinite approvals in two major ways:

A. When the Smart Contract Itself Is Malicious

Some malicious dApps and fake platforms ask for unlimited approval intentionally.

Once granted, they wait for users to deposit valuable tokens and then drain all assets linked to that token.

Examples include:

• Fake token airdrops

• Scam DeFi farms promising high APY

• Counterfeit NFT mints

• Deceptive airdrop claim websites

• Phishing platforms masquerading as popular dApps

B. When a Legitimate Project Gets Hacked

Not all infinite approval exploits involve malicious developers.

Sometimes:

• A legitimate DeFi protocol gets hacked

• Its smart contract is compromised

• Attackers gain authority of the contract

• They drain tokens from users who previously granted infinite approval

This has happened in major hacks such as:

• Curve Finance Exploits

• KyberSwap hack

• BadgerDAO exploit

• DForce attacks

• Euler Finance incident

In each case, the users with outstanding approvals were affected.

Real-World Damage Caused by Infinite Approvals

Infinite approval has caused millions of dollars in losses across various chains for casual users and seasoned DeFi players. This is because unlimited allowance grants the underlying contract unlimited spending power, making dApps with a large user pool of approvals a common target for hackers. Once the contract or its private keys are compromised, the attackers can instantly drain tokens from thousands of wallets simultaneously.

These losses commonly include:

• Stolen USDC: Attackers siphon stablecoins directly into their wallets.

• Drained USDT, usually immediately converted into harder-to-track assets

• Complete token balances wiped overnight, leaving users without any way to reverse these transactions.

Everything from DEX exploits to compromised staking protocols has taken place across major platforms.

This vulnerability is not theoretical; it remains one of the most actively targeted, easily scalable, and reliably exploited attack vectors across the entire DeFi ecosystem, making for repeated financial damage every year.

Why Infinite Approval Is Dangerous Even If Your Wallet Is Secure

One very common misconception among crypto users is the belief that:

"My private key is safe, so my tokens are safe."

While this sounds logical, it is not true with regards to infinite approvals. Wallet security and approval security are two completely different protective layers, and infinite approval bypasses many safety assumptions that users depend on.

The risk in giving a smart contract infinite approval does not need any of the following to be compromised:

• Your private key

• Your seed phrase

• Your wallet password or login

This is because infinite approval essentially pre-authorizes the contract to move a particular token on your behalf at any time.

The contract does not require your future confirmations or signatures, it already has the "permission slip" to spend your tokens up to an unlimited amount.

Even if:

• Your wallet is hardware-secured

• You never click on suspicious links.

• You keep your seed phrase offline

• You use 2FA and multi-wallet setups

… you remain exposed as long as the contract has an open unlimited allowance.

If the contract gets hacked, upgraded maliciously, or behaves unexpectedly, it can drain all approved tokens from your wallet without requiring any further interaction on your part.

That means your tokens can be moved, swapped, or disappeared entirely, while your private key remains untouched and uncompromised; it shows why infinite approval is dangerous, despite a “secure” wallet setup.

Signs You Might Have Given Unlimited Permission Unbeknownst to You

Most users unknowingly allow infinite allowances because dApps frequently:

• Utilize similar interface designs

• Do not display the approval amount

• Startup with "unlimited" options

• Do not show warnings

If you did ANY of the following, you likely granted infinite approval:

• Swapped tokens on Uniswap, SushiSwap, PancakeSwap, etc.

• Used a DeFi farm

• Staked tokens

• Joined liquidity pools

• Used a bridging service

• Minted NFTs from web-based platforms

If you cannot remember approving a certain amount, most likely the approval was for an unlimited amount.

Infinite Approval vs Limited Approval