How to Revoke Smart Contracts on Trust Wallet and Why It’s Important

On the first day of the new year, the crypto space got shaken up. One of the Bitcoin Core developers lost many of his coins due to a hack. Somebody compromised his PGP (encryption) keys. We show you some tips on how you can have a safer wallet experience.

So, let’s dive in and see how you can revoke an allowance or approval for a smart contract with Trust Wallet.

Why Should You Revoke Approvals or Allowances of Smart Contracts?

If you want to interact with a dApp, you need to approve this accordingly. You need to give the dApp or smart contract permission to move tokens around in your wallet. Otherwise, the smart contract can’t execute the trades on your behalf. So, although this sounds risky, you have to give a smart contract at least some allowance. In Web3, you can’t avoid this.

An example of this is adding liquidity to a pool or farm, staking a token, or swapping a token. If you don’t give allowance to the dApp to move your specific tokens around, nothing will happen. This makes sense, right?

The big question is, how much allowance do you give? The good news is that you can specify an exact amount. However, the downside here is that you will have to approve each amount, every time you want to deposit. So, instead, most smart contracts ask you to sign an unlimited allowance. Sure, this is convenient, but it’s also a lot riskier. Now you approve once, and there’s no need to approve each new transaction for a specific dApp.

However, this is precisely where the risk is. Your wallet is now potentially open to an exploit. Not only your deposited funds are now at risk, but also all other assets you think are safely stored in your wallet.

Even a hardware wallet like a Ledger Nano X or similar is at risk. To clarify this, you don’t need a seed phrase or private key to get your hands on somebody’s funds. All a bad actor needs is the allowance for the dApp. It’s still best practice to use a hardware wallet, though. This only shows that you still can be vulnerable.

How Do You Revoke Allowances for Smart Contracts?

In this article, we concentrate on ERC20 tokens. However, as we saw in the case of the Bitcoin Core developer, BTC or other coins are subject to the same issues. Nonetheless, we concentrate on Ethereum, BNB chain, and Polygon tokens. 

So, as an example, we show you how to revoke an allowance on a BSC address. For this example, we also use the Trust Wallet. However, this works similar with a MetaMask or other Ethereum-compatible wallets.

Another thing to be aware of is that you grant these allowances for a long period. Typically, they’re even permanent. So, to kick this off, we are going to revoke these allowances. This will give you a better insight and feel for what is going on. Just be aware that revoking an allowance triggers an on-chain transaction. In other words, you will need to pay gas fees. Now, on the BSC chain and Polygon, these transactions are cheap. On Ethereum, the transactions may be more costly.

It’s also important to understand that you can revoke two features. One is token approvals and the other one is dApp allowances. For NFTs, you want to revoke the token allowance. For DeFi, you aim to revoke dApp allowances.

There’s one more essential difference to point out. Disconnecting your wallet is different from revoking an allowance. If you disconnect your wallet, it doesn’t protect you from an allowance exploit. The only thing that happened is that a website can’t see your address anymore. However, the allowance you granted earlier is still active.

Revoking an Allowance

First, here’s the allowance you’re giving PancakeSwap to move your tokens around. It’s the “request approval for transactions.” Once you sign this, PancakeSwap can move tokens around in your wallet, without a limit. So, it’s of utter importance to make sure you connect to the original site! The picture below shows my mobile Trust Wallet with the “request approval for transactions.”

Trust Wallet

Now you can use the Beefy.finance platform to revoke allowances or approvals on the BSC chain. The Trust Wallet community wrote an easy to follow step-by-step article on how to do this. There are similar platforms available for different chains. For example:

Conclusion

We showed you a lesser-known way how to protect yourself from a potential wallet exploit. Revoking an allowance for a smart contract or a token allowance is essential. We advise you to this on a regular basis, at least once a month.

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