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solidityerc20

what's the purpose of the approve function in erc 20

I'm new in solidity and erc20, so I read ERC20 description on the openzeppelin and find this function which isn't clear for me.

approve(spender, amount)

What's the purpose of allowing to the spender spend my token, instead of send my tokens to the spender directly?

Solution

  • You can change the approved amount or revoke it altogether (only the unspent amount). But you cannot take back an already sent transfer.

    A common use case for the approve() function is trading on a DEX (decentralized exchange). You approve the DEX contract address to spend your USDT tokens for example. And when you want to buy an XYZ token (against USDT), the DEX simply pulls the already approved USDT from your address and sends you the XYZ tokens.