One quiet night, I decided to park some idle coins in a collateral protocol. Hit deposit wallet pops up, and a single word flashed: approve. Approve what? That pause is where wallet risk starts. In many DeFi apps, you’re not sending tokens—you’re granting permission. A smart contract can pull tokens only if you’ve approved it.
Falcon Finance (FF) works this way: you can post collateral to mint USDf and stake it for yield. But the protocol can only move your tokens if you give it an allowance first. Most ERC-20 tokens—stablecoins, altcoins, wrapped assets—follow this pattern. Even if you think “I never approve,” chances are you have, just not explicitly for your native chain coin.
The real danger? Wallet defaults. Many show unlimited allowances, never expiring. One click today can let a contract move your funds months later. Hack or accidental approval? Funds disappear without another prompt. Users then say, “I never sent anything”—but the old permission did.
Wallet Hygiene 101
Check your approvals. Use tools like Revoke.cash or Etherscan to see every contract that can spend your tokens. Expect surprises—old games, test apps, random mints.
Limit allowances. Don’t give access to your whole balance. If depositing 500 USDC, approve 500, not everything. One small change turns a full-risk exposure into a controlled action.
Revoke what’s unused. Setting allowances to zero stops unwanted spending. Small gas cost, big peace of mind. Treat it like a monthly sweep.
Extra Tips
One deposit flow may touch multiple contracts (minting, staking, routers). Don’t trust names—check addresses and tokens.
Split wallets: one “vault” for main funds, one daily wallet for routine clicks. Core stays clean even if the daily wallet gets messy.
Falcon also leverages multi-sig and MPC for custodial safety, but your own care is still critical.
Approvals aren’t evil—they’re tools. But like any sharp tool, leaving them lying around is a risk. Manage them. Limit them. Revoke them. Sleep better.
