What is ERC20 approve?



What is ERC20 approve?

If you are trading an ERC20 token on our platform then you will see an ERC20 Approve button before you are able to sign the transaction and complete your trade. The good news is you will only ever have to do this once per ERC20 token. And if you are just buying the token from an existing sell order, then you will not have to do it at all!

Why do ERC20 tokens need an extra transaction?

To understand why you need this extra transaction the first time and only once, you have to learn the differences between trading ERC20 and ERC223 tokens.


ERC223 standard was modeled after how native ether (ETH on ethereum, ETC on ethereum classic) is being used on the blockchain. Namely, when you want to spend your money in exchange for a good or service, or participate in a smart contract, you can attach a message to your transaction.

To make a somewhat literate analogy, when you go to a store to buy chewing gum with an ERC223 token, you would take out the tokens our of your wallet and tell the cashier: This is the payment for this chewing gum .


Unlike native ether or ERC223 tokens, it is impossible to attach a message with an ERC20 transfer. Instead, the designers of that standard thought it would be more logical for the merchants and/or smart contracts to pull money from your wallet.

In our little chewing gum world, this would mean coming up to the cashier, opening up your wallet in front of them and saying Hey, could you please take the payment for that chewing gum? Somehow this interaction was deemed natural and was widely adopted by the Ethereum community and is now spreading, like a plague, on other chains.

The only protection in the arsenal of the ERC20 token holder is the approve method. In order for others to pull money from your wallet you need to approve them.

In the case of Saturn Network, the traders need to approve the Enceladus smart contract to pull the tokens out of your wallet in order to sell them. Once the smart contract is approved the trading experience of both token standards would look the same.

Saturn Protocol token self-listing guide
Saturn Protocol token self-listing guide