If you do not know what is token approval, this article is for you. In this article we will talk about Token approval and why do we need it before swapping.
In web3, you will encounter a series of less simple transaction types, each of which can be identified in MetaMask when confirming the transaction.
What is Token Approval?
ERC-20 token approval is a method that allows a smart contract or other address to withdraw funds from the address that sent the transaction. In most cases, this must be done before the token is traded or funds are deposited into a smart contract (such as as adding liquidity).
Why do we need token approval before swapping?
Approval is considered an industry standard for all decentralized exchanges such as Uniswap, PancakeSwap, CowSwap, etc. and protects your wallet from being accessed by smart contracts without your permission. By design, smart contracts cannot access your tokens unless you finally approve access.
Once you have successfully approved your tokens for use with the contract, you do not need to approve them again. Note that approval is required for each different contract, including:
- Aggregation Protocol
- Limit Order Protocol
- Liquidity Protocol (Both Providing Liquidity and Farming)
- Governance Staking
So I hope you will now know what is token approval and why do we need token approval before swapping. At MetaMask, we believe in giving users visibility and control, which is why we are always improving the amount of information and user control over this permission request. MetaMask provides the ability to customize the DApp token limit when users connect to MetaMask.
