Step 1: take inventory

Wonder

1. How can a forgotten permission signature grant an attacker access to assets without ever revealing the private key?
2. Why does revoking unused token approvals require paying a network fee if no tokens are actually transferred during the process?
3. What is the difference between holding a wrapped asset on one chain and holding the native coin that backs it?

Explore

1. Before consolidating assets, every location where value sits requires documentation. This includes centralized exchange accounts, self-custody wallet apps, tokens across different chains, active staking positions, liquidity pool shares, pending airdrop claims, and every seed phrase in use. A complete inventory maps not just the balance but the structure of control: which keys hold which assets, and where those keys reside. Without this map, subsequent steps risk leaving value stranded or exposing it to unnecessary risk.
2. On Ethereum-style chains, token approvals represent a critical security vector. When interacting with decentralized applications, users sign ERC-20 approval transactions that grant smart contracts permission to spend specific tokens on their behalf. These permissions persist until explicitly revoked. If a user approved a contract for an initial interaction and never returned to revoke it, the contract retains unlimited or large spending power over those assets. A compromised or malicious contract can then drain the balance without further user interaction.
3. Approval checkers such as Etherscan’s token approval tool allow users to connect their wallet and view all active allowances. Revoking an unused approval is a transaction that costs gas fees, but it eliminates a potential attack vector. The trade-off is clear: paying a small fee now prevents the risk of losing significant value later. Approvals that back positions still in use do a job; stale approvals left by abandoned applications serve none.
4. Wrapped and bridged assets introduce additional complexity because they are claims on someone else’s custody or bridge infrastructure rather than native coins. A wrapped token on Ethereum represents a claim on Bitcoin held by a custodian; a bridged asset on another chain is a claim on the original asset locked in a contract. These wrappers depend on the solvency and honesty of intermediaries. In an inventory, it is essential to note which assets are native and which are derivative claims, as their security profiles differ significantly from holding the underlying coin directly.
5. On Solana, an SPL token account can name a delegate approved to spend up to a set amount, and that approval persists until the owner revokes it; some wallets and explorers list delegations and can revoke them. Solana drainers more often trick users into signing a transaction that transfers tokens or hands over a token account’s authority outright (lesson 7.1.3), so the inventory includes knowing which wallets have signed for which applications.
6. The final step in this inventory phase is a concrete check: open an approval checker for each active address and scan the list. Any contract not currently used for staking, lending, or active trading should be flagged for revocation. This process transforms a passive holding into an actively managed security posture. The cost is gas fees per revocation; the benefit is closing open doors that require no further user interaction to exploit.

Key facts

Exercise nine, six, three, one

Fact check

Dates, figures and claims checked against the published sources listed below.

• Etherscan Token Approval Checker Documentation
• Solana Program Library, Token program documentation (Approve and Revoke instructions)
• ERC-20 Standard Specification: approve() and allowance() functions
• BitGo WBTC Documentation: Wrapped Bitcoin Custody Model