Why is approval phishing more dangerous than a simple request to send coins?

Approval phishing is more dangerous than a simple request to send coins because the user may not transfer an asset directly, but grant a contract the right to take tokens later. The signature can look technical, while a broad allowance lets an attacker drain funds without a new confirmation.

What is an approval?#

In tokens such as ERC-20, approval lets one address or contract spend user tokens up to a chosen limit. This is needed for DEXs, lending protocols and many DeFi actions: the contract must be allowed to take the required amount during the operation.

The problem starts when the user does not understand who receives permission and how much is allowed. Unlimited approval is convenient because it avoids repeated confirmations, but it creates major phishing risk.

How does approval phishing work?#

An attacker creates a site that looks like an airdrop, NFT claim, eligibility check, wallet support page or known service. The user connects a wallet and signs an action, thinking no funds are moving. In practice, they may grant token-spending permission.

Chainalysis' article on approval phishing describes this as a distinct typology where social engineering and onchain infrastructure are used to drain wallets. The important point is that the attack does not always ask for a direct transfer.

Which signs should raise concern?#

First: the site asks for approval before explaining the real operation. Second: the limit looks too broad. Third: the domain differs from the official one. Fourth: the message creates urgency: claim now, last chance, verify wallet.

Fifth: the wallet shows an unclear contract interaction. If the user does not understand what is being signed, it is better to stop and verify through another source.

What are the limits and risks?#

Even experienced users can make mistakes because wallets display permissions differently. Sometimes the action looks harmless while details are hidden in an expandable section. A permission can also remain active after the tab is closed.

Trusted-service risk also exists. Even if approval was granted to a legitimate contract, old permissions should be reviewed because risks, interfaces and personal security models change.

How can the risk be reduced?#

A practical minimum is to use bookmarks for important sites, check domains, read signing types, set minimal limits instead of unlimited, keep large balances separately and regularly revoke unnecessary approvals through reliable tools.

Approval is a normal part of DeFi. But permission to spend tokens should be treated as a financial action, not an empty technical formality.