What is ERC20 approve?
If you are sending an ERC20 token on our platform then you will see an ERC20 Approve section before you are able to sign the transaction and complete your transfer.
The above picture shows that we need to approve 98.03 Dai tokens in order to proceed. You can set a large limit to avoid frequent approvals.
Why do ERC20 tokens need an extra transaction?
Unlike native ether, it is impossible to attach a message with an ERC20 transfer. Instead, the designers of that standard thought it would be more logical for the smart contracts to pull money from your wallet.
To make a somewhat literate analogy, when you go to a store to buy chewing gum with native ethers, you would take out the ethers our of your wallet and tell the cashier: This is the payment for this chewing gum .
In our little chewing gum world, transferring ERC20 tokens would mean coming up to the cashier, opening up your wallet in front of them and saying Hey, could you please take the payment for that chewing gum? Somehow this interaction was deemed natural and was widely adopted by the Ethereum community and is now spreading, like a plague, on other chains.
The only protection in the arsenal of the ERC20 token holder is the
approve method. In order for others to pull money from your wallet you need to
In the case of Chainsfr, the senders need to
approve the escrow multisig smart contract to pull the tokens out of your wallet in order to transfer them.
The escrow multisig smart contract can only send out ERC20 tokens with sender's signature, thus, it is safe to approve a higher amount to reduces the number of approve operations in the future.