Postmortem: Reducing Stale Approval Exposure by 78%

Objective

This postmortem reviews a targeted initiative to reduce stale approval exposure by at least 60% within one month while preserving normal DeFi operations.

Scope

• Wallets in scope: 9 operational wallets
• Chains in scope: Ethereum, Base, Arbitrum
• Assets in scope: stablecoins and treasury-related ERC-20 tokens

Methodology

We defined stale approvals as:

• no token transfer activity in 45+ days, or
• protocol relationship already deprecated internally

Approvals were exported weekly, normalized, and assigned:

• risk score (1-5)
• business owner
• intended usage frequency

KPI Framework

Primary KPIs:

• Stale approvals count
• Estimated value at risk under unlimited approvals
• Mean time to revoke flagged approval

Secondary KPIs:

• Workflow breakage incidents after revocation
• Number of emergency re-approvals

Results

KPI	Baseline	Week 4
Stale approvals	58	13
Value at risk (modeled)	100% baseline	22% baseline
Mean time to revoke	9.2 days	1.8 days
Workflow breakages	-	2 minor incidents

The final stale-approval reduction reached 78%, exceeding target.

Risk Scoring Model Used

Factor	Weight
Approval type (unlimited/exact)	35%
Token criticality	30%
Spender trust confidence	20%
Last-used recency	15%

Sample Revocation Queue (redacted)

queue_item_id: RQ-044
chain: Ethereum
wallet: 0x43a1...f81E
spender: 0x81B2...4d7C
risk_score: 4.6/5
status: revoked

Incident Notes

Two business workflows briefly failed after revocation due to missing owner tags. Both were recovered in under 15 minutes and documented for recurrence prevention.

Key Findings

Ownership tagging is non-optional

Without explicit owner mapping, revocations can break hidden dependencies.

Weekly cadence outperforms monthly sweeps

Smaller, regular cleanup cycles reduced operational disruption and improved response times.

Risk visibility improves team behavior

Publishing a lightweight weekly risk dashboard changed signer behavior before policy enforcement.

Policy Changes Adopted

• Maximum 30-day lifetime for non-essential unlimited approvals
• Required owner tag at approval creation
• Automatic stale-review queue every Monday
• Fast-track revoke path for unknown spender addresses

Conclusion

Structured metrics and ownership discipline transformed approval hygiene from ad-hoc cleanup into routine operations. The measurable risk reduction justified making the process permanent.