Bancor Sues Uniswap, Accusing the Industry Giant of Stealing Its Patented Technology

Bancor's parent companies, Bprotocol Foundation and LocalCoin Ltd., allege Uniswap Labs and its foundation infringed on two U.S. patents for automated market maker (AMM) technology.

Decentralised finance (DeFi) circles are abuzz after Bancor filed a blockbuster lawsuit against Uniswap, accusing the industry behemoth of stealing its patented technology. The case, which was filed in a New York federal court, could have significant implications for how innovation is protected in the open-source-driven crypto sector.

The lawsuit, which was filed by Bancor's parent companies, Bprotocol Foundation and LocalCoin Ltd., claims that Uniswap Labs, the company behind the Uniswap protocol, and its foundation infringed on two U.S. patents for automated market maker (AMM) technology.

According to legal documents, Bancor developed the "constant product" AMM model and secured patents for it as early as 2017. This system, which uses algorithmic pools for token swaps, is commonly used by modern decentralised exchanges (DEXs). Uniswap launched its protocol in late 2018 and quickly became one of the most popular DEXs, while Bancor now argues that Uniswap's success stems directly from its patented innovation.

"We must act when competitors use our technology without authorisation," said Bancor project lead Mark Richardson. "Unchecked infringement harms all DeFi innovators and threatens the sector's long-term growth."

Bancor's timeline begins with a provisional patent filing in January 2017, followed by a whitepaper publication and the launch of the first CPAMM-based DEX by June 2017. The patents cover methods for adjusting liquidity pool ratios using smart contracts, a process that is central to Uniswap's operations.

On the other hand, Uniswap's protocol was first deployed in November 2018, and the lawsuit alleges that every version of Uniswap (v1 to v4) infringes on Bancor's patents. Despite this, Uniswap has become one of the largest DEXs, with over $2.8 trillion in lifetime trades, compared to Bancor's modest $378,579 in daily volume.

Uniswap Labs has swiftly dismissed the lawsuit as "a wasteful distraction." A spokesperson for the company said that Uniswap's code has been public for years and that they will defend themselves vigorously during this period of historic DeFi growth.

"We are disappointed to see Bancor engage in this frivolous lawsuit," the spokesperson said. "Uniswap Labs and the Uniswap Foundation have innovated and disclosed their technologies openly and collaboratively throughout the history of the Uniswap protocol."

Founder Hayden Adams also took to X, formerly Twitter, to call the suit baseless and highlight technical differences between the protocols.

"Later Uniswap versions use decentralised hooks and other features Bancor never developed. This suit is a blatant attempt to extract value from Uniswap's success," Adams argued.

The lawsuit comes as several crypto projects are facing legal challenges. It will be interesting to see how this case plays out and what impact it will have on the future of the crypto industry.

Several X users have blasted Bancor for betraying DeFi's open-source roots and community-driven ethos. They accused Bancor of attempting to claim credit for a common technological concept used by many early DEXs.

However, other X users applauded Bancor for standing up for inventor rights and the importance of intellectual property protection in any industry. They argued that Uniswap's success was a direct result of stealing Bancor's technology and that it should be held accountable.

This case could have significant implications for the future of the crypto industry. If Bancor is successful, it could lead to other projects being forced to license technologies or pay royalties to early innovators. This could stifle the permissionless ethos that has driven so much innovation in the crypto sector.

It could also lead to a wave of patent lawsuits as projects try to protect their inventions. This could create a legal quagmire that would be difficult and costly for projects to navigate.

Ultimately, this case will decide whether projects can use and improve upon each other's inventions openly or if they will be forced to innovate in labs and bunkers, according to a recent article by CC Harvest.

This case is sure to be closely watched by members of the crypto community. It could have a major impact on the future of the industry.output:

The decentralised finance (DeFi) world is swaying after Bancor filed a bombshell lawsuit against Uniswap, accusing the industry giant of stealing its patented technology.

The lawsuit, which was filed in a New York federal court, could reshape how innovation is protected in the open-source-driven crypto sector. Bancor claims Uniswap built its empire using intellectual property developed nearly a decade ago without permission or payment.

Clash Of The DEX Titans

Bancor's parent companies, Bprotocol Foundation and LocalCoin Ltd., allege Uniswap Labs and its foundation wilfully infringed on two U.S. patents for automated market maker (AMM) technology.

According to court documents,