Understanding Smart Contract Approvals
- Purpose: Facilitate actions like transferring, swapping, lending, staking tokens, or listing NFTs.
- How does it work: Connect wallet → Initiate transaction → Confirm approval → Spend funds.
How does a contract approval look like?
Risks
- Approval Abuse: Phishing attacks can exploit approvals to transfer funds out of your Wallet Address. Scammers use fake dApps to gain unlimited approvals and transfer funds using functions like `transferFrom` or `Multicall`.
How to protect yourself
- Limit Approvals: Avoid unlimited approvals and approving to Externally Owned Account, addresses controlled by an individual, or unverified smart contract. Revoke approvals granted before when they are no longer needed.
- Use Trusted Platforms: Verify URLs and avoid suspicious sites. Binance Verify helps you to check if the source is verified and officially from Binance.
- Beware of Scams: Be cautious of unsolicited offers and get-rich-quick schemes or fake compensations or fake airdrops.
- Secure Wallets: Use reputable wallets with built-in security measures, like Binance Web3 Wallet, which alerts users to risky transactions.
- Know your Risks: All dApps come with inherent risks, and your assets are not entirely safe. DeFi protocols can be vulnerable to hacker attacks that drain deposits, or websites can be compromised to redirect users to phishing sites. Always DYOR, understand the risks, and proceed only when you fully comprehend how it works and are comfortable with the potential risks involved.
Binance Web3 Wallet Features
- Risk Alerts: Warns users of high-risk transactions.
- Approval Management: Allows users to review and revoke approvals and disconnect from suspicious dApps.
How to review and revoke your contract approvals?
-> Check out this page for further information: https://www.binance.com/en/events/revoke-approval-to-rdntcapital
Further Reading
- Binance Blog on Phishing:
https://www.binance.com/en/blog/tag/phishing-46
- Binance Blog on Crypto Scams: https://www.binance.com/en/blog/security/common-crypto-scams-in-2023-tips-to-avoid-crypto-scammers--part-1-2224325545448407496
