Set Token Allowances

To allow a third-party service—such as the 0x API—to move your ERC-20 tokens, you must first grant a token allowance. When using 0x APIs, this means approving either AllowanceHolder or Permit2 to move tokens on your behalf.

Which contract to approve depends on the API endpoint you’re using:

The wallet holding the tokens (taker) must approve the contract address returned in issues.allowance.spender or allowanceTarget from the /price or /quote response.

Allowance Target vs. Entry Point

In API v2, allowance management and swap execution are handled by different contracts.

1. Allowance Target Contract

• Purpose: The contract where token approvals are set.
• Which contract: Permit2 (/swap/permit2) or AllowanceHolder (/swap/allowance-holder), depending on the approval method.
• How to find it: Returned in issues.allowance.spender or allowanceTarget.

2. Entry Point Contract

• Purpose: Executes swaps; send the data payload here.
• Which contract: 0x Settler (/swap/permit2) or AllowanceHolder (/swap/allowance-holder), depending on the approval method.
• How to find it: Returned in transaction.to.

This separation enhances security by isolating allowance management from swap execution.

Example response from /swap/permit2/quote will return back the contract address if an allowance needs to be set:

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"issues": {
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  "allowance": {
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  "actual": "0",
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  "spender": "0x000000000022d473030f116ddee9f6b43ac78ba3"
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},

How to Set a Token Allowance

You can approve allowances programmatically or via UI:

• Using wagmi
• Using viem
• Using Etherscan

Using wagmi

wagmi provides a clean interface for reading and writing allowances:

1. Read current allowance using useReadContract.
2. Simulate and write approval with useSimulateContract and useWriteContract.
3. Wait for transaction confirmation using useWaitForTransactionReceipt.

Here’s a minimal example:

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const { data: allowance } = useReadContract({
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  address: sellTokenAddress,
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  abi: erc20Abi,
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  functionName: "allowance",
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  args: [taker, PERMIT2_ADDRESS],
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});
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const { data } = useSimulateContract({
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  address: sellTokenAddress,
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  abi: erc20Abi,
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  functionName: "approve",
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  args: [PERMIT2_ADDRESS, MAX_ALLOWANCE],
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});
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const { writeContractAsync } = useWriteContract();
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const { data: receipt } = useWaitForTransactionReceipt({
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  hash: writeContractResult,
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});

Using Etherscan

You can manually set allowances via Etherscan:

1. Navigate to the token’s contract page (e.g., WETH).
2. Go to Write Contract > approve
3. Enter:

• _spender: the issues.allowance.spender address from the API.
• _value: the maximum uint256 value (2^256 - 1).

Revoking Allowances

To revoke an allowance, you will need to set the allowance to 0. This can be done programmatically or through a UI such as https://revoke.cash/ .

Common Issues

When setting the token allowance, make sure to provide enough allowance for the buy or sell amount as well as the gas; otherwise, you may receive a ‘Gas estimation failed’ error.