Four Ways to Authorize USDC Smart Contract Interactions with Circle SDK

USDC's superpower is programmability - you can choose how users authorize movements and how tokens interact with smart contracts. In this post, we'll explore four common authorization flows for EVM compatible chains: approve, permit (EIP 2612), transferWithAuthorization (EIP 3009), and Permit2, clarifying where allowances live (or don't) and when to use each. Permit2 is an external Uniswap contract, not part of the USDC token contract; its approvals are stored in Permit2, not in USDC.

What "allowance" really means in each flow

• approve
  Sets allowances[owner][spender] inside the USDC token contract. Spender later pulls with transferFrom, which decrements that allowance.
  
  
• permit (EIP 2612)
  User signs off chain, then anyone submits permit(...) to the USDC token. That call writes the allowance in the same mapping as approve, just without the user spending gas to sign.
  
  
• transferWithAuthorization (EIP 3009)
  No allowance is created. The signed authorization lets a relayer move tokens once within a time window. For contract pulls, use receiveWithAuthorization(...).
  
  
• Permit2
  If you use AllowanceTransfer, the allowance is stored in the Permit2 contract, not in USDC. If you use SignatureTransfer, there is no persistent allowance; it is a one time signed transfer validated by Permit2.

1. Classic allowance: approve

Best for: repeated pulls, maximum compatibility, simplest mental model.

Allowance location: USDC token at allowances[owner][spender].

Trade offs: two onchain steps; educate users on revoking unlimited approvals.

constUSDC = '0x1c7D4B196Cb0C7B01d743Fbc6116a902379C7238';
constOWNER_WALLET_ID = '...'; 
constSPENDER_WALLET_ID = '...';   
constSPENDER = '0xYourSpender';   
constOWNER = '0xOwner';
constRECIPIENT = '0xRecipient';
constAMOUNT = '1000000';
 awaitclient.createContractExecutionTransaction({
 walletId: OWNER_WALLET_ID,
 contractAddress: USDC,
 abiFunctionSignature: 'approve(address,uint256)',
 abiParameters: [SPENDER, AMOUNT],
 amount: '0',
 fee: { type: 'level', config: { feeLevel: 'HIGH'} },
});

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2. Gasless approval: permit (EIP 2612)

What it does: user signs an EIP 712 Permit message with a chosen value (the allowance). A relayer submits permit(...) to the USDC contract, which writes the allowance just like approve.

Best for: allowance based integrations that want to avoid a user paid approval transaction.

Allowance location: USDC token. After permit(...), USDC.allowance(owner, spender) equals the signed value.

consttypedData = {
 domain: {
 name: 'USDC',
 version: '2',
 chainId: 84532, // Base Sepolia  verifyingContract: '0x036CbD53842c5426634e7929541eC2318f3dCF7e',
},
 types: {
 EIP712Domain: [
{ name: 'name', type: 'string'},
{ name: 'version', type: 'string'},
{ name: 'chainId', type: 'uint256'},
{ name: 'verifyingContract', type: 'address'},
],
 Permit: [
{ name: 'owner', type: 'address'},
{ name: 'spender', type: 'address'},
{ name: 'value', type: 'uint256'},
{ name: 'nonce', type: 'uint256'},
{ name: 'deadline', type: 'uint256'},
],
  },
 primaryType: 'Permit',
 message: {
 owner: '0xOwnerAddress',
 spender: '0xRelayerOrSpenderAddress',
 value: Number(ethers.parseUnits('3.0', 6)),
 nonce: 0, 
 deadline: Math.floor(Date.now() / 1000) + 3600,
},
 };
 const{ data } = awaitclient.signTypedData({
 walletId: 'your-circle-wallet-id',
 data: JSON.stringify(typedData),
 memo: 'EIP 2612: Permit USDC allowance',
});
 constsignature = data.signature;
console.log('signature:', signature);

To use the signature later, call permit(address,address,uint256,uint256,bytes) on the USDC contract, then pull with transferFrom.

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3. One time signed transfer: transferWithAuthorization (EIP 3009)

What it does: user signs a one time EIP 712 authorization with a bytes32 nonce and validity window. A relayer submits transferWithAuthorization(...) to move tokens immediately. When the contract pulls funds from the user's wallet, use receiveWithAuthorization(...).

Best for: checkout or payment flows where you want gasless user experience without persistent allowances.

Allowance location: none. No change to USDC.allowance(...).

constCHAIN_ID = 84532;
constUSDC = '0x036CbD53842c5426634e7929541eC2318f3dCF7e';
constRELAYER_ADDRESS = '0xRelayerSpenderAddress'; 
constOWNER = '0xOwnerAddress';                     
constVALUE_USDC = '3.00';        
constVALID_AFTER = 0; 
constVALID_BEFORE = Math.floor(Date.now()/1000) + 3600;
 constvalueWei = Number(ethers.parseUnits(VALUE_USDC, 6));
constnonceBytes32 = ethers.hexlify(ethers.randomBytes(32)); 
 consttypedData = {
 domain: { 
 name: 'USDC', 
 version: '2', 
 chainId: CHAIN_ID, // Base Sepolia  verifyingContract: USDC, 
},
 types: {
 EIP712Domain: [
{ name: 'name', type: 'string'},
{ name: 'version', type: 'string'},
{ name: 'chainId', type: 'uint256'},
{ name: 'verifyingContract', type: 'address'},
],
 TransferWithAuthorization: [
{ name: 'from', type: 'address'},
{ name: 'to', type: 'address'},
{ name: 'value', type: 'uint256'},
{ name: 'validAfter', type: 'uint256'},
{ name: 'validBefore', type: 'uint256'},
{ name: 'nonce', type: 'bytes32'},
],
  },
 primaryType: 'TransferWithAuthorization',
 message: {
 from: '0xOwnerAddress',
 to: '0xRelayerSpenderAddress', 
 value: valueWei,
 validAfter: VALID_AFTER,
 validBefore: VALID_BEFORE,
 nonce: nonceBytes32,
},
};
 const{ data } = awaitclient.signTypedData({
 walletId: 'your-circle-wallet-id',
 data: JSON.stringify(typedData),
 memo: 'EIP-3009 authorization',
});
constsignature = data.signature;

Execution later is a single call to transferWithAuthorization(...), or your contract can call receiveWithAuthorization(...) to safely pull funds.

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4. Unified approvals and one time transfers: Permit2

What it does: an external Uniswap contract that standardizes approvals and signed transfers across many tokens.

• AllowanceTransfer creates or updates allowance inside Permit2 for (owner, spender, token). USDC.allowance(...) will not show this. Inspections and revocations happen through Permit2.
  
  
• SignatureTransfer performs a one time signed transfer with no persistent allowance, validated by Permit2.
  
  

Best for: DEX and aggregator style apps that want consistent flows for many tokens.

constCHAIN_ID = 84532; 
constPERMIT2 = '0x000000000022D473030F116dDEE9F6B43aC78BA3';
constSPENDER = '0xYourSpenderContract'; 
constOWNER = '0xOwnerAddress';
constTOKEN = '0xUSDCAddress';
constDEADLINE = Math.floor(Date.now()/1000) + 3600;
constAMOUNT = 3_000_000;
 consttypes = {
 EIP712Domain: [
{ name: 'name', type: 'string'},
{ name: 'chainId', type: 'uint256'},
{ name: 'verifyingContract', type: 'address'},
],
 PermitDetails: [
{ name: 'token', type: 'address'},
{ name: 'amount', type: 'uint160'},
{ name: 'expiration', type: 'uint48'},
{ name: 'nonce', type: 'uint48'},
],
 PermitBatch: [
{ name: 'details', type: 'PermitDetails[]'},
{ name: 'spender', type: 'address'},
{ name: 'sigDeadline', type: 'uint256'},
],
};
 constdetails = [{
 token: TOKEN,
 amount: AMOUNT,       
 expiration: DEADLINE,
 nonce: 0,
}];
 consttypedData = {
 domain: {
 name: 'Permit2',
 chainId: CHAIN_ID,
 verifyingContract: PERMIT2,
},
  types,
 primaryType: 'PermitBatch',
 message: {
details,
 spender: SPENDER,
 sigDeadline: DEADLINE,
},
};
 const{ data } = awaitclient.signTypedData({
 walletId: 'your-circle-wallet-id',
 data: JSON.stringify(typedData),
 memo: 'Permit2 batch approval',
});
 constsignature = data.signature;
console.log('Permit2 signature:', signature);

To execute later, call Permit2.permitTransferFrom(...). For persistent approvals with Permit2, use its AllowanceTransfer flow and remember that the allowance is stored in Permit2, not in USDC.

Choosing a flow

• Recurring pulls and simplicity
  approve/transferFrom or permit if you want gasless approval. Both rely on allowances stored in the USDC contract.
  
  
• One time payments and gasless checkout
  transferWithAuthorization for a single transfer with no persistent allowance.
  
  
• Many tokens and unified UX
  Permit2 for standardized approvals and revocations across assets. Its allowances live in Permit2.

That is the landscape for EVM chains. Pick the flow that matches your UX and security goals, and use the Circle Developer Controlled Wallets SDK to sign and execute with clean, repeatable patterns.