Solidity Authorization Mechanisms: Comparing approve vs. transferFrom and the Advantages of permit

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In the Ethereum ERC20 token standard, token holders typically authorize and transfer funds using the approve and transferFrom functions. With the introduction of EIP-2612, the permit function emerged as a revolutionary authorization method leveraging off-chain signatures to streamline transactions and enhance efficiency. This article explores the key differences between traditional approve/transferFrom and the modern permit approach, highlighting how off-chain signatures improve security and user experience.

Traditional Authorization: approve and transferFrom

The conventional ERC20 token authorization requires two on-chain transactions:

  1. approve Function

    • Purpose: Allows token owners to authorize a spender address to transfer a specified token amount.

    • Limitations:

      • Owners must manually call approve for each authorization.
      • Requires an additional transferFrom call by the spender.

  2. transferFrom Function

    • Purpose: Enables the spender to transfer tokens from the owner’s account, provided approved allowances exist.

    • Limitations:

      • Transactions fail if allowances are insufficient.
      • Two separate transactions increase gas costs and complexity.

Workflow:

  1. Owner calls approve (Transaction #1).
  2. Spender calls transferFrom (Transaction #2).

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Modern Authorization: permit’s Off-Chain Signatures

EIP-2612’s permit function introduces off-chain signatures to authorize token transfers with just one on-chain transaction:

How permit Works:

  1. Off-Chain Signature:

    • The owner signs a message (containing spender, amount, and deadline) without gas costs.

  2. On-Chain Submission:

    • The spender submits this signed message via permit (paid in gas).

  3. Automated Approval:

    • Smart contracts verify the signature (using ecrecover) and auto-approve the spender.

Key Benefits:

✔ Reduced Transactions: 1 on-chain tx vs. 2 in traditional methods.
✔ Enhanced Security: Time-bound signatures prevent replay attacks.
✔ Improved UX: Owners sign once; spenders handle the rest.
✔ Cost Efficiency: Lower gas fees by eliminating redundant approvals.

👉 Learn how permit optimizes DeFi workflows.

Comparison Table

| Feature | approve + transferFrom | permit |
|------------------|---------------------------------------|-----------------------------------|
| Transactions | 2 (approve + transferFrom) | 1 (permit submission) |
| Security | Prone to infinite approvals | Time-bound, non-replayable |
| Gas Cost | Higher (2 tx fees) | Lower (1 tx fee) |
| User Effort | Manual approvals per action | One-time signature |

FAQs

1. Why is permit more secure than approve?

permit uses cryptographic signatures with expiration deadlines, eliminating risks like infinite approvals or replay attacks.

2. Can permit work with existing ERC20 tokens?

No—tokens must implement EIP-2612’s permit function. Many modern DeFi tokens now support it.

3. Does the owner pay gas for permit?

No. Owners sign off-chain; only the spender pays gas to submit the permit.

4. What happens if a permit signature expires?

The transaction fails if the deadline passes, ensuring no stale authorizations.

Conclusion

The permit mechanism revolutionizes token authorizations by combining off-chain signatures with on-chain execution. For DeFi platforms and frequent token interactions, it reduces costs, enhances security, and simplifies user workflows. As blockchain adoption grows, permit sets a new standard for efficient and secure token management.

For developers and users alike, embracing permit means faster, cheaper, and safer transactions—making it a cornerstone of modern Ethereum applications.