# Execution
{% hint style="danger" %}
**Router V3 is still undergoing an audit.** Use at your own discretion. Funds stored in the router (including vault deposits) might be lost.
{% endhint %}
Tycho Execution provides tools for **encoding and executing swaps** against Tycho Router and protocol executors. It is divided into two main components:
* **Encoding**: A Rust crate that encodes swaps and generates calldata for execution.
* **Executing**: Solidity contracts for executing trades on-chain.
The source code for **Tycho Execution** lives at [`crates/tycho-execution`](https://github.com/propeller-heads/tycho-indexer/tree/main/crates/tycho-execution) inside the [Tycho monorepo](https://github.com/propeller-heads/tycho-indexer). For a practical example of its usage, please refer to our [Quickstart](/tycho/readme.md).
## Token transfers
You can transfer tokens in one of three ways with Tycho Execution:
* Permit2
* Standard ERC20 Approvals
* Using Vault funds
See how to change between these options when encoding [here](/tycho/for-solvers/execution/encoding.md#usertransfertype).
### Permit2
Tycho Execution supports **Permit2** for token approvals. Before executing a swap via our router, you must approve the **Permit2 contract** for the specified token and amount. This ensures the router has the necessary permissions to execute trades on your behalf.
Permit2 handling is **not** part of the encoding step. You are responsible for creating and signing the permit yourself. The `Permit2` utility struct is publicly exported from the encoding crate, so you can use it to build the `PermitSingle` and obtain the data needed for signing.
For more details on Permit2 and how to use it, see the [**Permit2 official documentation**](https://docs.uniswap.org/contracts/permit2/overview).
### **Standard ERC20 Approvals**
Tycho also supports traditional ERC20 approvals. In this model, you explicitly call `approve` on the token contract to grant the router permission to transfer tokens on your behalf. This is widely supported and may be preferred in environments where Permit2 is not yet available.
### Using the Vault
The TychoRouter includes a built-in vault ([ERC6909](https://eips.ethereum.org/EIPS/eip-6909)) that lets you deposit, hold, and withdraw tokens directly in the router contract. The vault tracks per-user balances, so your tokens are only accessible by you.
The router draws from your deposited balance instead of performing a `transferFrom` on your wallet. This saves gas (no approval or external transfer needed) and lets you use fees, proceeds from previous trades, or pre-positioned liquidity directly.
Fees earned through the fee-taking system are automatically credited to the fee receiver's vault balance, making them immediately available for future swaps or withdrawals.
More on the Vault [here](/tycho/for-solvers/execution/vault.md).
## Security and Audits
The Tycho Router V2 has been audited by [Maximilian Krüger](https://snd.github.io/). Past audits are [here](https://github.com/propeller-heads/tycho-indexer/tree/main/docs/audits).
{% hint style="danger" %}
**Router V3 is still undergoing an audit.** Use at your own discretion. Funds stored in the router (including vault deposits) might be lost.
{% endhint %}
If you discover potential security issues or have suggestions for improvements, please reach out through our official channels.
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