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Crypto Investor Issues Warning About Smart Contract Approvals

A crypto investor has taken to Reddit to warn the community about the potential dangers of unchecked smart contracts.

Person touching the Defi logo
Person touching the DeFi logo

The user, 4cademy, advised readers to regularly revoke access to these contracts to protect against malicious activity.

Recent Hacks and Exploits Prompt Warning

The warning is on the heels of a difficult year for crypto hacks and exploits. As such, 4cademy emphasized the importance of being proactive in smart contract approval management.

Risk of Malicious Smart Contracts

According to 4cademy, some users of decentralized finance (DeFi) protocols or nonfungible tokens (NFTs) may mistakenly approve malicious smart contracts through phishing attempts. These scams, which are known as "ice phishing," have previously been successful in stealing funds from users.

Even "Good-Behaving" Contracts Should Be Revoked

Even smart contracts with a reputation for being "good-behaving" should be revoked, as hackers may be able to find exploits to steal funds from connected wallets. In 2022, the ten largest exploits resulted in approximately $2.1 billion stolen primarily from DeFi protocols and cross-chain bridges.

Tips for Managing Smart Contract Approvals

4cademy offered several tips for managing smart contract approvals, including using different wallets for different purposes and revoking approvals regularly. Other Reddit users suggested using third-party services to check and revoke approvals across various chains, such as BNB Smart Chain, Ethereum, and Polygon. One user even advised interacting with as few smart contracts as possible to minimize risk.