How Does Gas Cost Influence the Decision to Use Approve ?
Using approve and then transferFrom requires two separate transactions, each incurring a gas fee. However, granting a large or infinite allowance via approve means a user only pays the initial approval gas fee once, allowing for many subsequent transferFrom transactions (trades) without further approval fees.
This trade-off between security (smaller allowance) and cost (one-time fee) is a key user decision.
Glossar
Infinite Allowance
Authorization ⎊ Infinite allowance is a smart contract authorization mechanism, typically associated with the ERC-20 standard's approve function, where a token holder grants a third-party contract or address permission to spend an unlimited quantity of their tokens.
Gas Cost Influence
Network Congestion Effect ⎊ Gas Cost Influence refers to how network demand for block space directly impacts the price users must pay to include their transactions, a variable that introduces significant uncertainty into the execution cost of on-chain derivative settlements.
TransferFrom
Transfer ⎊ The term "TransferFrom" within cryptocurrency, options trading, and financial derivatives denotes the explicit delegation of asset control or rights from one party to another, a core mechanism underpinning many operational and strategic processes.