Token Allowance Management for Non-updatable Allowance Tokens


In the context of ERC-20 tokens, allowance management is a critical aspect of ensuring that tokens can be securely and efficiently traded. An allowance is a pre-approved limit of tokens that an account (usually a smart contract) can transfer on behalf of another account. However, certain tokens, such as Tether (USDT) on Ethereum, do not support updating an existing allowance amount directly. This means that if the approved allowance is not sufficient for a trade, you must revoke the current allowance and then set a new one.

Token Allowance Management for USDT

Key Points

  • Non-Updatable Allowance: USDT on Ethereum does not allow incrementing or decrementing an existing allowance. Instead, the allowance must be set to zero before it can be changed.

  • Allowance Process: To increase the allowance for a spender, you must first revoke the current allowance by setting it to zero and then approve the new desired amount.

  • Security Considerations: This process ensures that partial updates to allowances do not inadvertently create security risks or inconsistencies in token management.

Steps for Managing Allowance

  1. Revoke Current Allowance: await usdtContract.approve(spender, 0);

  2. Approve New Allowance:

    await usdtContract.approve(spender, amount); amount can be the exact amount you want to approve, or MaxUnit

For more information, you can check USDT on Ethereum smart contract source code here:

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