Web3 & The Trap Of ‘SetApprovalForAll’
By Sandeep Kasalkar
‘SetApprovalForAll’ is a feature you’ll come across frequently as you work with Web3. This function is most typically seen when you offer your NFTs for sale on a marketplace, and its purpose is simple: it allows the marketplace to shift your NFT out of your wallet and into someone else’s whenever it is sold.
The dangers of ‘SetApprovalForAll’
The ‘SetApprovalForAll’ function is frequent but it’s also rather an unsafe interaction for you as a user due to its broad reach.
By approving this function, you grant the platform access to all the ERC20 tokens or NFTs associated with a specific smart contract that are stored in your wallet. Since this is an open-ended agreement, it also applies to any additional tokens from that smart contract that are added to your wallet in the future.
It’s like writing a blank cheque to a buddy. You’re effectively saying, “I trust this platform to accomplish what it claims it will, and to behave within the constraints I’m expecting”.
But what if you make a blunder?
Scams & ways to spot them
When it comes to crypto frauds, ‘SetApprovalForAll’ is a major player, so it’s critical to know when it’s safe to sign and when something is odd.
This notice should only appear when you are listing your NFT on a marketplace or engaging with a DEX. This makes sense, because when you sell or trade tokens, you must grant that platform permission to move them from your wallet. Outside of these scenarios, however, finding this smart contract function should raise red flags.
Always ask yourself why you are giving someone else access to your tokens. Thinking about it in this way makes determining the legitimacy of the transaction easier.
Be alert when you see these functions:
- Minting an NFT
- Buying an NFT
- Signing up for an allow list
Now that you know what it really means to sign this kind of transaction, you’re equipped to evaluate each instance in which it occurs and determine whether it raises any concerns.
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