A Reddit user suggested crypto investors remove all the past 2 years of smart contract approvals, to remain away from any kind of big risk.
In the past couple of years, Defi (decentralised finance) based protocols & wallets surged rapidly, to provide decentralised crypto financial services easily. But in the list of such protocols, many suspicious/malicious codes were introduced in the Crypto sector by bad actors.
On 1 Jan 2023, A Reddit user wrote a post on the r/CryptoCurrency subreddit and suggested all the crypto investors revoke all the permissions that they approved for the third-party protocols.
Reddit user noted that when he examined his own past 2 years of smart contract approvals, he found that some of the protocols allowed by him intentionally & mistakenly to withdraw unlimited amounts of funds from the wallet, which was not a good thing for the self-custody of the crypto assets in a Defi wallet & protocols.
“You should at least check your approvals too and possibly revoke them. The reason for that is that one might have accidentally approved a malicious contract that is only waiting for a certain amount of funds to steal or some hacker might find a bug in a good-behaving contract that can be exploited. I am repeating myself here,” a Reddit user explained.
Simple trick, Instant hack
Through malicious smart-contracts, bad actors can easily loot all the funds from the wallet. Usually, bad actors send fake airdrop tokens to the crypto wallet users ( e.g Tronlink, Trust Wallet, Coinbase wallet, etc).
Usually, these bad actors mentioned the process to “cash out the fake token” in description of that token and the majority of the noobs fall in the trap of hackers easily by approving the third-party malicious smart contract code.