Definition
An approval exploit is a class of security risk in which an attacker leverages token approval or allowance mechanisms to move a victim’s assets without further consent. It typically arises when a smart contract or interface induces a user to grant excessive or unsafe allowances, which the attacker then invokes through malicious or compromised contracts. The exploit does not usually break the underlying token standard, but instead abuses the legitimate authorization model encoded in the token’s approval logic. As a result, the transfer of funds is technically valid on-chain, even though it violates the user’s expectations of safety and scope.
This risk is closely tied to how token allowance states are stored and referenced by smart contracts. Once an attacker has access to a high or unlimited allowance, they can repeatedly call transfer functions on behalf of the user’s address until the approved balance is drained. Approval exploits often rely on deceptive transaction prompts, misleading contract names, or reusing previously granted permissions in unexpected ways. The core characteristic is the misalignment between what the user believes they have authorized and what the allowance actually permits in practice.
Context and Usage
In security discussions, an approval exploit is referenced as a permission-abuse risk rather than a direct protocol failure. It is frequently associated with ERC-20 style token designs, where a separate approval step sets an allowance that other contracts can spend. When these allowances are misconfigured, never revoked, or granted to untrusted contracts, they create a persistent attack surface that adversaries can later activate. The exploit therefore sits at the intersection of smart contract design, wallet UX, and user understanding of on-chain authorization semantics.
The term is often used alongside the concept of allowance to describe how granular or revocable token permissions should be. Security auditors and protocol designers treat approval exploits as a distinct category of threat that must be considered when designing contract interfaces and permission flows. In incident reports, labeling an attack as an approval exploit highlights that the attacker operated within formally granted permissions, even though those permissions were obtained or structured in a deceptive or unsafe way. This classification helps distinguish it from bugs that stem from arithmetic errors, reentrancy, or other low-level contract flaws.