Token Approval is a transaction that users have to make before using any DeFi platform. This is considered a mandatory requirement to protect your wallet from being accessed by smart contracts without your permission.
Why do you need approve token?
Under the DeFi mechanism, Decentralized Applications (DApps) use smart contracts to execute transactions on blockchain. For example, Uniswap uses smart contracts to allow users to exchange ERC20 tokens, or PancakeSwap supports trading for BEP20 tokens. To do that, users must first give permission for the smart contract to use the tokens on your wallet.
Once you agree to approve the token, the next transaction will proceed. This is meant as a “permission” to protect your wallet from scam DApps.
Notes about Token Approval:
- You only need to approve the token the first time you use it on a platform.
- Token approval transactions also need to pay Gas fee similar to other transactions on blockchain.
- You should read about the DApp carefully before connecting the wallet and agree to approve token, avoiding the risk of scam DApps stealing all assets.
Currently, the DApps feature on RICE Wallet allows you to access and use more than 1000 reputable DApps on different network and category, that have been selected and verified.
In addition, RICE Wallet is still supporting users with 30% Gas fee for all transactions made on RICE, including Token Approval transactions. You will have a chance to get up to $1 cashback per transaction. Download the application and experience here.