Why Your First Swap Costs More: Token Approvals

Your first token swap can cost more than later swaps if the token has not yet been approved for trading. Before you place an order, it helps to know which wallet action costs network fees and which is only a signature.

What does a token approval do?

A token approval gives a specific smart contract permission to move a specific token from your wallet. It does not send your tokens or complete the swap; it sets up the permission the swap needs.

For example, when selling an ERC-20 token through the cowswap interface, check the sell token first: the protocol’s vault relayer needs permission to collect it after your order is matched. Your order is a separate step, so approving the token does not commit you to a trade.

Think of approval as authorizing a payment terminal to charge a card up to a limit. The approval names the token and the spender contract; it does not give every app access to your wallet.

Why can approval add to the first swap’s cost?

An on-chain approval is a blockchain transaction, and transactions use gas: the network fee paid to process an action. You usually pay that fee in the network’s native token, such as ETH on Ethereum, even though you are approving a different token.

So the first trade can involve two wallet steps: approve the sell token, then sign the swap order. On CoW Swap, an order signature is typically gasless, but an on-chain approval still needs gas. That means you may need a small amount of the network’s native token before you can trade.

Before and after: say your first swap needs an approval transaction that costs the equivalent of $3 in network fees. Your next swap with that same token and spender may need only an order signature, so that separate $3 approval cost does not recur. These are illustrative figures; actual gas costs change with network activity and the transaction.

Can you approve without paying an approval gas fee?

Sometimes. Certain tokens support gasless approvals, which let you authorize spending by signing a message instead of submitting an on-chain approval transaction. The interface can indicate when this option is available, but support depends on the token and wallet; for example, CoW Protocol’s instructions say gasless approvals are not available for Smart Contract wallets.

If gasless approval is unavailable, the ordinary approval transaction is the expected first step. Keep enough native token in the wallet to cover it, and check that your wallet is on the same network as the token you plan to sell. A token with the same name on another network is a different asset for this purpose.

How much permission should you give, and what should you check?

Some interfaces offer an unlimited allowance, meaning the spender can use any amount of that token up to your wallet balance. That avoids another approval for later trades with the same token and spender, but it grants broader permission than a one-time trade needs.

A limited allowance caps how much the spender can take. It can be a better fit if you expect to trade once or prefer tighter permissions, though you may need another approval when the allowance runs out. Follow the wallet prompt and check the spender and token before signing; an approval should name the contract needed for the swap, not an unrelated address.

For a first cowswap trade, I would check whether the token supports gasless approval, then use a limited allowance if I only expect to trade once. If I plan to reuse the same token and spender, I would weigh the convenience of a larger allowance against the extra permission it grants.

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