The recent Concentric Finance exploit on January 22, 2024, which resulted in approximately $1.7 million in losses through a compromised deployer wallet, serves as a stark reminder that smart contract approvals are one of the most underestimated risks in decentralized finance. When Bitcoin trades at $39,500 and Ethereum at $2,310, the total value locked in DeFi protocols represents billions of dollars in user funds — much of it exposed through outdated or excessive token approvals. This advanced guide walks experienced DeFi users through setting up a comprehensive approval monitoring and revocation system.
The Objective
The goal is to build a personal security workflow that continuously monitors your wallet for risky token approvals, automatically alerts you to new approval requests, and provides a streamlined process for revoking unnecessary permissions. By the end of this guide, you will have a system that protects your funds even when a protocol you have previously interacted with gets compromised.
Token approvals work by granting a smart contract permission to spend tokens on your behalf. When you interact with a DeFi protocol like Uniswap, Aave, or Concentric Finance, you approve the protocol contract to transfer your tokens. The danger arises when these approvals remain active after you finish using a protocol, or when the approved amount is set to unlimited — a common default that many users accept without understanding the implications.
Prerequisites
Before proceeding, ensure you have the following tools and knowledge in place. You need a Web3 wallet such as MetaMask or Rabby installed in your browser. You should be comfortable reading blockchain explorers like Etherscan or Arbiscan. A basic understanding of ERC-20 token standards and the approve function is assumed. You will also need access to a terminal if you want to set up the automated monitoring scripts described later in this guide.
For the automated monitoring component, you will need Node.js version 18 or higher installed, along with npm. The scripts use ethers.js for blockchain interaction and can be configured to monitor wallets across Ethereum, Arbitrum, Polygon, and other EVM-compatible networks.
Step-by-Step Walkthrough
Step 1: Audit your existing approvals. Begin by visiting Revoke.cash or similar approval checking tools. Connect your wallet and select each network where you have active DeFi positions. The tool will display all active token approvals, including the contract address, the token being approved, and the approved amount. Pay particular attention to approvals set to unlimited amounts and approvals for protocols you are no longer actively using.
Step 2: Prioritize high-risk approvals. Not all approvals carry equal risk. Prioritize revoking approvals for protocols that have been recently exploited, protocols you no longer use, and any approval that grants unlimited spending authority. The Concentric Finance incident demonstrates how an exploited protocol can drain user funds even from users who were not actively interacting with the protocol at the time of the breach — as long as the approval remains active.
Step 3: Revoke systematically. Use Revoke.cash or Etherscan to revoke approvals one at a time. For each revocation, verify the transaction on the blockchain explorer before confirming it in your wallet. Batch similar revocations together when possible to save on gas fees. On networks with lower fees like Arbitrum or Polygon, the cost of revoking all unnecessary approvals is typically under a dollar total.
Step 4: Set up automated monitoring. Create a monitoring script using ethers.js that checks your wallet for new approvals on a regular schedule. The script should compare current approvals against a whitelist of approved contracts and alert you when a new, unrecognized approval is detected. Store your whitelist in a JSON configuration file and update it whenever you intentionally interact with a new protocol.
Step 5: Implement approval hygiene practices. Going forward, change your interaction pattern with DeFi protocols. Instead of approving unlimited token amounts, calculate the exact amount you need for a transaction and approve only that amount plus a small buffer for slippage. Rabby wallet provides a helpful feature that simulates transactions and shows exactly what approvals you are granting before you sign.
Troubleshooting
If you encounter a failed revocation transaction, the most common cause is insufficient gas. Ensure your wallet has enough native tokens (ETH for Ethereum, MATIC for Polygon, ETH for Arbitrum) to cover the transaction fee. Some older token contracts use non-standard approval functions that may not be compatible with standard revocation tools — in these cases, you may need to manually call the approve function with an amount of zero.
If you suspect that a protocol you have approved has been compromised, do not wait for confirmation. Revoke all approvals immediately. It is always better to revoke unnecessarily and re-approve later than to lose funds while waiting for definitive information. The few cents in gas fees for a revocation are trivial compared to the potential loss from a compromised protocol.
For wallets with many active positions across multiple networks, consider using a dedicated security dashboard that aggregates approval data from all chains. Tools like or an equivalent can provide a unified view of your exposure across the entire DeFi ecosystem.
Mastering the Skill
Wallet security in DeFi is not a one-time task but an ongoing practice. Make approval auditing a regular part of your DeFi routine — weekly for active traders, monthly for casual users. Stay informed about protocol exploits by following security-focused accounts on social media and subscribing to alerts from blockchain security firms like CertiK, PeckShield, and Trail of Bits.
Consider upgrading to a hardware wallet for your primary DeFi interactions, as hardware wallets require physical confirmation for every transaction, including approvals. This provides an additional layer of protection against phishing attacks and malicious dApp interactions. The combination of approval monitoring, minimum-necessary approvals, and hardware wallet security creates a robust defense against the most common attack vectors in the current DeFi landscape.
As the DeFi ecosystem continues to grow and attract more users and more capital, the incentives for attackers will only increase. The users who develop strong security habits now will be the ones best positioned to navigate the increasingly complex threat landscape of tomorrow decentralized finance.
Disclaimer: This article is for educational purposes only and does not constitute financial or security advice. Always verify security practices with qualified professionals before implementing them with significant funds.
I check my approvals weekly on Revoke.cash. Found a 2022 approval to a compromised contract last month. Would have been drained if the attacker came back.
I wish I had seen this before the last drainer got me, revokemore. People forget that ‘infinite approval’ is basically giving a stranger the keys to your house. Revoke.cash should be everyone’s homepage.
The unlimited approval pattern that most DeFi protocols default to is a design failure. Should always ask for exact amounts.
the ux argument for unlimited approvals is that users hate signing every single transaction. but the tradeoff is catastrophic when a protocol gets compromised. defaults really do matter
been meaning to set up monitoring for my wallets. this guide actually gives a concrete workflow instead of just saying ‘be careful’ so thanks for that
Do we have a guide for monitoring suspicious contract calls in real-time? I’m tired of manually checking Etherscan every hour. We need better wallet-level alerts that aren’t just spam.
check out Forta or Rekt on telegram. both give real time alerts for suspicious contract interactions. not perfect but way better than manually refreshing etherscan every hour
the Concentric exploit was $1.7m from a compromised deployer wallet, not even a smart contract bug. team side opsec is just as important as user side approval hygiene