Manage tokens on the behalf of to call a smart contract

Question

I would like to transfer tokens to defi smart contracts on the behalf of a third-party. I see no option apart from (1) the third-party to transfer to me directly (2) the third-party to pre-sign transaction (sent to me) so that I can execute them later.

Most of the DeFi protocols make use of 'approve' + 'transferfrom' internally - but because of the use of msg.sender in the 'transferFrom', it only works if the third party interacts with the protocol directly - and not via me (the ERC20 allowance check fails).

Am I correct? Is there any other way to circumvent this restriction for protocols such as AAVE or UNISWAP - for ex.

Answer 1

You gave yourself the answer in your question:

Most of the DeFi protocols make use of 'approve' + 'transferfrom' internally...

The solution is to use the approve + transferFrom flow yourself. You have the user set the token approval to your contract, then you or the user calls the function on your contract which does a transferFrom to take the tokens from the user. Then your contract can interact with whichever protocol using those tokens (and itself setting approvals for those protocols to use those tokens)