What Is Token Approval?

A token approval is a transaction that authorizes a smart contract to transfer tokens from your wallet up to a specified amount. When you approve a token, you're not sending tokens immediately—you're giving the contract permission to move them later when you execute another transaction.

In airdrop farming, token approvals are unavoidable. Before you can deposit tokens into a liquidity pool on Uniswap, stake tokens in a restaking protocol like Eigenlayer, or participate in yield farming on Arbitrum, you must first approve that contract to handle your tokens. The approval sets a spending limit—you might approve 1,000 USDC, meaning the contract can use up to that amount but no more.

Why This Matters for Airdrop Farming

Token approvals are a critical security checkpoint. A malicious contract could drain your wallet if you approve it with an unlimited allowance (sometimes called "infinite approval"). Many farming participants use infinite approvals for convenience—one transaction instead of re-approving for each action—but this is risky. If the contract gets compromised or you interact with a fake protocol, attackers can steal all approved tokens.

When farming for airdrops, you'll encounter approval transactions constantly: approving USDC to a DEX before swapping, approving LP tokens to a staking contract, approving collateral to a lending protocol. Each approval costs gas and requires a separate blockchain transaction. Smart farmers track their active approvals and revoke unused ones to reduce attack surface.

Practical Example

Suppose you're farming the Jito airdrop by staking SOL. You'd first approve the Jito staking contract to access your SOL (Step 1), then execute the stake transaction (Step 2). If you later find another opportunity on a different protocol, you must approve that new contract separately. Some tools like Revoke.cash let you see all your active approvals across protocols and revoke them if a contract becomes suspicious or obsolete.