When we interact with a DeFi protocol, an NFT marketplace, or a decentralized exchange (DEX), we almost always need to sign an “Approve” or “Permit” transaction. This authorization gives the contract the right to spend a specific token (or an unlimited amount of it) on our behalf. The problem is that once the transaction is complete, the contract still has permission unless we explicitly revoke it.
Why are open contract approvals a real danger?
Protocol compromise (exploits): If a legitimate protocol you interacted with in the past is hacked and its code or front end is compromised, hackers can exploit all the old approvals users left active to drain their wallets. How can you protect yourself and manage these permissions?