Approval Front-Running

Approval front-running is a security exploit that targets the approve function in token smart contracts, such as those following the ERC-20 standard. When a user grants a dApp (decentralized application) or a smart contract permission to spend their tokens, they broadcast a transaction to the network. A malicious actor, known as a front-runner, can monitor the public mempool for these pending approval transactions. By paying a higher gas fee, the attacker can get their own malicious transaction—which calls the same approve function but sets the spender to an address they control—included in a block before the user's legitimate transaction. This effectively steals the spending authority the user intended to grant.

The core vulnerability exploited is the race condition between the user's intended approval and the attacker's malicious one. The standard approve function typically overwrites any existing allowance. Therefore, whichever transaction is confirmed last dictates the final approved spender. If the attacker's transaction is mined first, the user's subsequent transaction will overwrite the attacker's address with the intended dApp's address, seemingly correcting the issue. However, in the brief window between the two transactions, the attacker can immediately execute a transferFrom operation to drain the user's tokens up to the newly set allowance limit.

To mitigate this risk, developers have implemented safer approval patterns. The most common is the increaseAllowance/decreaseAllowance pattern introduced in later ERC-20 implementations, which modifies an existing allowance rather than overwriting it. For users, best practices include: - Setting allowances only to the exact amount needed for a transaction. - Using a time-bound allowance where supported. - Revoking unused approvals via tools like Etherscan's Token Approval Checker. - Considering the use of private transaction relays (e.g., Flashbots) to avoid exposing transactions to the public mempool where front-running occurs.

Approval front-running, also known as an approval phishing or infinite allowance attack, exploits the public and pending nature of transactions in a blockchain's mempool. When a user signs a transaction granting a smart contract permission to spend their tokens (an approve() call), that transaction is broadcast to the network and sits in the mempool before being mined. A malicious bot monitors the mempool for these specific transactions. Upon detecting one, the attacker quickly submits their own transaction with a much higher gas fee, aiming to have their transaction processed first by the network's validators or miners.

The attacker's transaction is a malicious call to the same approve() function, but it changes the spender address parameter from the legitimate, intended contract to an address the attacker controls. If the attacker's transaction is mined first, it overwrites the user's original approval, granting the attacker's address unlimited (or a very high) spending allowance for the user's tokens. The user's original, legitimate transaction then fails or is mined afterward, but it is often irrelevant as the attacker has already gained control. This exploit capitalizes on the race condition created by transaction ordering based on gas price.

A classic example is a user interacting with a new decentralized exchange (DEX). The user signs an approval to allow the DEX router to spend 10 UNI tokens. An attacker sees this, front-runs it with a higher gas fee, and changes the approval to grant the attacker's wallet an allowance for 10,000 UNI tokens. The attacker then immediately uses a transferFrom() call to drain the user's full UNI balance. This attack is distinct from sandwich attacks on trades, as it targets permission-granting transactions directly rather than manipulating liquidity pool prices.

To mitigate approval front-running, developers and users must adopt specific security practices. Users should revoke unused approvals regularly using tools like Etherscan's Token Approvals checker. For new interactions, they should use the increaseAllowance() and decreaseAllowance() functions if available, as these are safer than approve(). Furthermore, using permit signatures (EIP-2612) for gasless approvals or setting time-bound allowances can reduce exposure. Wallets can also implement warnings for approvals to unknown or high-risk contracts, adding a crucial layer of user scrutiny before a transaction is signed and broadcast to the vulnerable mempool.

An approval front-running attack is a multi-step exploit that unfolds in a predictable sequence on the blockchain. It begins when a user, the victim, signs a transaction granting a token approval to a legitimate but vulnerable smart contract, such as a DEX router or a lending protocol. This transaction is broadcast to the mempool, where it becomes visible to network participants. The attacker, running a specialized sniping bot, continuously scans the mempool for these specific approval transactions, which are identifiable by their function signature and target contract address.

Upon detecting a target transaction, the bot's core function is transaction replacement. Using a higher gas price or a priority fee, the attacker immediately submits a malicious transaction designed to interact with the same vulnerable contract before the victim's approval is finalized. This malicious transaction typically calls a function—like transferFrom—that utilizes the newly granted but not-yet-executed approval. Due to the fee-based ordering of transactions in blocks, the attacker's higher-paying transaction is mined first, creating a critical race condition on-chain.

The attack concludes with the asset drain. Because the victim's approval transaction is processed after the malicious call, the smart contract logic executes the attacker's withdrawal request using the freshly authorized allowance. The attacker successfully transfers the victim's tokens to a controlled address, and the original, now-spent approval is finalized, often leaving the victim confused by an empty wallet despite the approval appearing to go through normally. This flow highlights the inherent risks of permissionless mempools and the finality of smart contract interactions once initiated.

The primary defense against approval front-running is the use of revocable approvals with spending limits. Instead of granting an infinite (type(uint256).max) allowance, users should approve only the exact amount needed for a specific transaction. Modern wallet interfaces and security tools often prompt users to set a custom limit. Furthermore, employing deadline parameters in decentralized exchange interactions can invalidate a transaction after a set time, preventing a captured transaction from being executed later under unfavorable conditions.

On the technical layer, gas optimization and private transaction relays are critical. Submitting transactions with competitively high gas prices can reduce the time window for front-running, though this is costly. More effectively, using services like Flashbots Protect or TxFlash, which submit transactions directly to miners/validators via a private mempool, prevents them from being visible in the public mempool where they can be targeted. Developers can also implement commit-reveal schemes, where a user first submits a hashed intent, obscuring details until the final execution transaction.

For smart contract developers, architectural patterns like pull-over-push payments and the Checks-Effects-Interactions pattern are vital for internal state safety, but specific to approvals, integrating permit signatures (EIP-2612) allows token approvals via off-chain signatures that are used in a single transaction, eliminating the standing approval vulnerability entirely. Regular approval revocation via tools like Revoke.cash or Etherscan's Token Approval tool is a crucial user habit to minimize exposure from past, unused approvals.