Glossary
What is an ERC-20 token allowance?
An ERC-20 allowance lets a spender move up to a set amount of a token from your address. What it limits, what it doesn't, and how to revoke it.
A token allowance is the amount of an ERC-20 token that an owner has authorised a specific spender address to transfer from the owner's account, set with approve and spent with transferFrom.
How does it work?
EIP-20 defines approve(spender, value) as allowing the spender to withdraw from your account multiple times, up to value, and says calling it again overwrites the current allowance. allowance(owner, spender) returns what remains. The token contract enforces the cap, so a spender can never move more than you approved. The standard also notes a race when changing an allowance from one non-zero value to another, and suggests user interfaces set it to 0 first. The spender then calls transferFrom to move tokens, and what it moves comes out of the remaining allowance. Some tokens, USDC among them, also support EIP-3009's transferWithAuthorization, a signature that authorises one specific transfer rather than a standing allowance; x402's exact scheme uses it on EVM chains.
In practice
Allowances are how most apps get permission to move your tokens without your key. For an agent, an allowance to a relayer lets small payments go through unattended. Size it as money you could lose, and remember it stays in place until it is spent or changed. Before approving, check the spender address and the token contract your wallet shows you, not just the amount.
What it does not mean
- Approving isn't paying. No tokens move when you approve.
- An allowance doesn't limit the destination. The spender decides where tokens go, within the amount.
- Allowances don't expire under ERC-20; revoke by approving zero.
- Disconnecting a wallet from a website does not remove an allowance it was granted. Only a new approve transaction changes it.
Where does Veyra fit?
Veyra's auto-pay on Pro and Team uses a capped USDC allowance on Base to Veyra's relayer, and because an allowance doesn't constrain the recipient, auto-pay requires a recipient allowlist. Veyra builds the approve or revoke transaction; your wallet signs and submits it.
Sources
Guides that use this term
- Is it safe to approve a token allowance for an AI agent?What an ERC-20 allowance does and doesn't limit when it powers an agent's unattended payments, and how to size and constrain one.
- How to revoke an AI agent's payment accessPause, rotate or revoke the agent's credential, and separately revoke any on-chain allowance. What each step stops and what it leaves in place.
- How to restrict who an AI agent can payA recipient allowlist limits where an agent's money can go, which amount caps can't. How to build one, match addresses safely and handle new payees.
This page explains how agent payments and the related technology work. It is not financial, investment, legal or tax advice. Protocols and provider features change; check the linked official sources before relying on a detail.