Allowance

What is the Allowance?

Allowance or access permissions, allow a third party to have the right to carry out a transaction of a certain amount of user's tokens, which are associated with the user's address. All this without giving the private key of the user's address.
Allowance costs a small amount of gas and is vital to interact with the protocol.

Where is it used?

Our protocol uses Allowance when dealing with situations involving any token that is directly residing on the user's wallet; for instance:
  • BMI tokens; when staking them in native BMI staking, or paying the 1% claim fee
  • stkBMI tokens; when staking them in the voting process
  • USDT; when providing coverage, or paying the Premium
  • BMIxCover tokens; when staking them to earn BMI yield

What is the Unlimited Allowance?

To avoid the Allowance process becoming tedious or even annoying, it's possible to set an Unlimited Allowance for a particular token. Doing so will allow the user to only have to go through the Allowance process once for each type of token used.
Unlimited Allowance can greatly reduce gas fees, as it removes the need for repeatable transactions.

Is Unlimited Allowance safe?

It all depends on when, how, and by who is it used. In the case of our protocol, the simple answer is yes. However, it's a decision that all of our users need to make for themselves. As such it's never forced, both "Regular" and "Unlimited" Allowance types will always be viable for the user.
Unlimited Allowance is an advanced procedure that should be used only as a result of a conscious decision.
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What is the Allowance?
Where is it used?
What is the Unlimited Allowance?
Is Unlimited Allowance safe?