Step 3: Token Approval (ERC-20 Standard)

Regulatory Context: Token approvals comply with ERC-20 standard and are required per Ethereum protocol specifications. This step ensures proper authorization before token transfers.

Verification of Existing Allowance


const tokenContract = new ethers.Contract(
  sellToken,
  ["function allowance(address owner, address spender) view returns (uint256)"],
  provider
);
 
const currentAllowance = await tokenContract.allowance(
  userAddress,
  data.dexRoute.target // ⚠️ Use target from quote!
);
 
if (currentAllowance < sellAmount) {
  // Approval transaction required
  console.log("APPROVAL_REQUIRED: Insufficient allowance");
} else {
  // Sufficient allowance exists
  console.log("APPROVAL_VALID: Proceeding to transaction execution");
}

Approval Transaction Request


const tokenWithSigner = new ethers.Contract(
  sellToken,
  ["function approve(address spender, uint256 amount) returns (bool)"],
  signer // Connected wallet
);
 
// Option 1: Maximum allowance (reduces future approval transactions)
const approveTx = await tokenWithSigner.approve(
  data.dexRoute.target,
  ethers.MaxUint256 // Maximum uint256 value
);
 
// Option 2: Exact amount approval (enhanced security, requires approval per transaction)
// const approveTx = await tokenWithSigner.approve(data.dexRoute.target, sellAmount);
 
console.log("APPROVAL_PENDING: Awaiting blockchain confirmation");
await approveTx.wait(); // CRITICAL: Must wait for transaction confirmation
console.log("APPROVAL_CONFIRMED: Transaction mined successfully");

Critical Implementation Requirements

Critical Requirements - Do Not Skip:

Router Address: Must use dexRoute.target from quote response (varies by execution venue)
Transaction Confirmation: Must await approveTx.wait() before proceeding to swap execution
Gas Costs: Approval transactions typically consume 46,000-65,000 gas units
Security Consideration: Maximum allowance reduces transaction overhead but increases smart contract risk exposure

Approval Strategy Comparison

Approach	Security	UX Impact	Gas Efficiency
Maximum allowance (MaxUint256)	Lower	Better	High (one-time cost)
Exact amount	Higher	Requires approval per swap	Lower (recurring cost)

User Communication Template


[Status Update]
Phase: Token Authorization
Action: Approving WETH spending rights
Expected Duration: 15-45 seconds (network dependent)
Transaction Type: ERC-20 Approval

[Next Steps]
Upon confirmation: Proceed to swap execution
Estimated Total Time: 1-2 minutes

Previous: Step 2: Quote Request Next: Step 4: Sign & Submit