Capability Delegation

This core security principle is enforced by granting a contract or user only the minimum permissions necessary to perform a specific task. For example, a DeFi protocol might be delegated the right to spend a specific token up to a set amount, rather than receiving an unlimited approval for all tokens in a wallet.

Delegations are narrowly defined to limit risk. Common scopes include:

• Spending Cap: A maximum amount a contract can transfer.
• Time Lock: An expiration date for the delegation.
• Function Selector: Permission to call only specific functions on a target contract.
• Asset Specificity: Delegation for a single ERC-20 token, not all assets in a wallet.

Unlike traditional token approvals, delegations can be designed to be revocable at any time by the delegator. They are also often time-bound, automatically expiring after a set block height or timestamp, which mitigates the risk of forgotten, stale permissions being exploited.

This model is foundational for secure DeFi composability. It allows protocols to interact with user assets in a controlled way without requiring constant transaction signing. For instance, a lending protocol can be delegated the right to liquidate a collateral position, while a yield optimizer can be delegated the right to harvest and compound rewards.

Standard token contracts like ERC-20 use the approve and transferFrom functions for basic delegation. More advanced patterns are formalized in standards like ERC-2612 (Permit for gasless approvals) and ERC-2771 (meta-transactions). The ERC-4337 account abstraction standard also relies heavily on delegated signature verification for user operations.

Capability delegation navigates the trade-off between security and user experience. Unlimited approvals are a major security risk but require fewer transactions. Granular, expiring delegations are far more secure but can increase transaction frequency and complexity for users, a challenge addressed by session keys and account abstraction.

A user can delegate the capability to sign transactions for a specific smart contract function without handing over their private key. For example, delegating the right to vote with their tokens in a DAO to a trusted delegate, or allowing a dApp's UI to submit a specific type of swap transaction on their behalf. This is more secure than providing a full private key or unlimited spending approval.

In blockchain games, a player can create a session key—a temporary capability—that allows the game client to perform specific in-game actions (like moving a character or using an item) for a limited time. This eliminates the need to sign a transaction for every minor action, improving UX, while strictly limiting the scope of what the game can do with the user's assets.

A user can delegate a capability to a DeFi aggregator or smart wallet, allowing it to execute a complex, multi-step transaction (e.g., a cross-chain swap followed by a deposit into a yield vault). The capability is scoped to only the required tokens, contracts, and functions, preventing the aggregator from accessing any other assets in the user's wallet.

A service provider can issue a capability token to a third-party analytics dashboard. This token grants read-only access to specific on-chain data or event logs from the provider's contracts. The provider maintains control and can instantly revoke this access by invalidating the capability, unlike with traditional API keys which may have delayed revocation.

Traditional ERC-20 approve() grants a spender unlimited or fixed access to a user's token balance, creating persistent security risks. This coarse-grained permission is difficult to revoke without complex patterns and is a major vector for exploits if a spender contract is compromised.

EIP-2612 permit() introduces off-chain signatures for gasless token approvals. A user signs a structured message containing the spender, amount, and a deadline. The spender submits this signature on-chain to gain approval, eliminating the need for a prior transaction and improving UX for DeFi onboarding.

Applications use session keys—temporary private keys delegated to a client—to allow seamless interactions without constant wallet pop-ups. For example, a gaming dApp might receive a key valid for 24 hours to submit moves, which is revoked automatically after expiry or by the user's main key.

This model treats permissions as unforgeable tokens (capabilities) that must be presented to perform an action. It enforces the principle of least privilege: a delegated agent can only perform the exact authorized action on a specific resource, drastically reducing the attack surface compared to all-or-nothing approvals.

Effective delegation requires clear revocation. Common patterns include:

• Time-based expiry via deadline parameters.
• Nonce invalidation where a new signature cancels old ones.
• Explicit revocation functions called by the delegator.
• Consent-ledger patterns that track active permissions on-chain.

The process of verifying what a specific identity is allowed to do. In blockchain, this is often managed via cryptographic signatures. Capability delegation is a specific implementation of authorization that focuses on transferring discrete permissions, not just verifying identity.

The core Cosmos SDK message types that implement capability delegation.

• MsgGrant: Creates a grant, delegating specific permissions (e.g., send, delegate) from a granter to a grantee for a defined period.
• MsgRevoke: Explicitly revokes a previously granted authorization before its expiration.

A critical security feature where every delegated capability has a defined expiration time (absolute timestamp) or expiration height (block number). This ensures delegated permissions are not permanent and automatically revert, limiting the attack surface and need for manual revocation.

A common, specific use case for capability delegation. A token holder (delegator) can grant a validator the permission to bond tokens on their behalf without transferring custody. This uses the delegate authorization type within the Cosmos staking module.