DeFi safety: approvals, contracts, and exit plans

DeFi is powerful, but it removes the guardrails. Your risk comes from approvals, signatures, and smart contract bugs.

Understand approvals

• Many DeFi actions require token approvals (permission for a contract to spend your tokens).
• Unlimited approvals are convenient, but they can be catastrophic if a contract is exploited.

Practical safety moves

• Use a small “DeFi wallet” separate from your vault holdings.
• Prefer minimal approvals (exact amount or small limits) when possible.
• Revoke old approvals you no longer need.
• Don’t interact with brand-new, unaudited contracts with meaningful funds.

Have an exit plan

• Know how to unwind positions fast if something looks wrong.
• Keep enough native gas token for emergency moves.
• Assume the UI can break — understand the basics of what you’re doing.

Bottom line: DeFi can be worth it, but treat it like an adversarial environment.