Introduction

Every trader in the crypto space has a wallet for storing several digital assets and token. If not, where do you intend to store your assets? The major mistake investors make is thinking their wallet is already secure without the need for them to adjust any setting. Let's quickly dive into this article properly. ready?

What You Need to Know

Your wallet is only secure if you make it so. You wouldn't want to store coins worth millions without protecting them. This is why you need to safeguard your ERC-20 wallet from ever-increasing risks. ERC-20 is linked to the Ethereum Blockchain, and the examples of tokens on this platform include USDC and DAI.

Your wallet can be attacked through so many methods unknown to you. The first is the 'Approve' method. Whenever you want to use DApps, it will need your ERC20 tokens approval. For instance, if you want to deposit DAI in Aave, you will need to give the smart contract powering Aave DApps access to your DAI. This is the only way you can deposit your DAI in another transaction.

This 'Allow' icon appears in the user interface of your Ethereum wallet. In theory, the allowance amount is flexible, but most DApps ask for an unlimited number to simplify the UX to reduce the number of transactions users will need to make to use the wallet app. The main problem is that users think they only grant access to a particular transaction/amount. Meanwhile, you are granting access to all of your holdings in that particular token for an extended period, if not forever.

So, imagine a situation where the DApps are exposed to a rogue network or virus. Scammers in the crypto space will take advantage of this privilege to cart away the holdings of the DApps user without any consent. This is like opening the door of one's house to criminals. The worse fact is that these scammers can take all the holdings of a user at any time, and the user will just be absolutely clueless. Well, not anymore again by virtue of you reading this post.

Now, How Do you Secure your Wallet from this Threat?

The best news is that you can actually secure your wallet against these kinds of threats. Now, we will explain just two major ways you can take your wallet security seriously in the next section, especially if your wallet is a Standard Ethereum wallet like MyEtherWallet. There are a lot of wallets that have affected custom means to even interact with DApps. Now, to the two methods;

Revoking access to your tokens manually

Whenever you feel like there is a problem after granting access to DApps, you can revoke your access manually by using a tool like Token Allowance Checker. This tool lets you connect to your wallet and scan the blockchain to find every DApp allowance linked to your ETH address. From this point, edit your allowance by setting it to 0 to erase every history, or set it however you feel is necessary. This change of allowance can be executed by interacting with each of the ERC20.

One of the ways to succeed in the crypto sphere is to practice this step from time to time to make sure your wallet is safe. You might even mistakenly click 'allow' without knowing, so a little cross-check isn't bad. You need to know that every transaction will be processed on-chain, so you have to spend some of your money. It is better to spend a little now to keep what you have than lose everything in the long run. Gas fee might scare you, but don't worry. Download the Gas Station Network extension to keep tabs on your gas fee, so you can edit it when you notice that the gas fee is low.

Smart contracts wallet protection.

The second way to protect your assets from theft is by using a smart contract wallet. They are more flexible in how they relate with other smart contracts. Due to this, several of them have affected custom methods to handle allowances and improve security. That's all for now on today's episode. Kindly let us know if you have any questions in the comment section.