Bancor Sues Uniswap Labs, Accusing the DEX of Copying Its Patented CPAMM Technology

The team behind the decentralized finance (DeFi) protocol Bancor has filed a lawsuit against decentralized exchange (DEX) Uniswap, accusing it of copying key technology

Decentralized finance (DeFi) protocol Bancor has filed a lawsuit against decentralized exchange (DEX) Uniswap, alleging that the exchange has been using a patented technology in its flagship constant product automated market maker (CPAMM) model.

The suit, filed on Thursday in the U.S. District Court for the Southern District of New York, claims that Uniswap has been using this system since launching its first version in 2018 and continued to build on it through to its latest v4 release in January.

According to the lawsuit, Bancor patented the CPAMM mechanism in 2017. The technology, which enables on-chain token swaps without the need for order books, was a key enabler for the rise of DEXs.

At present, Bancor is a liquidity protocol with a total value locked (TVL) of around $59 million, according to DeFiLlama. Meanwhile, Uniswap is a DEX with nearly $5 billion in TVL.

"Bancor's patented technology is one of the most important innovations in blockchain, and we are exceptionally proud of the role it has played in revolutionizing the world of DeFi," said Mark Richardson, Project Lead at Bancor.

"However, when an organization continuously uses our invention without our authorization and does so as a means of competing with us, we must take action. For the last eight years, Uniswap has been using this patented technology without Bancor's permission. As a result, we have taken legal action to defend our technology for the good of the entire DeFi community."

In response to the lawsuit, Hayden Adams, the CEO of Uniswap Labs, called the filing "possibly the dumbest thing I've ever seen" in a post on X earlier today. He added that he looks forward to not thinking about this "until a lawyer tells me we won."

Uniswap Labs did not immediately respond to The Defiant's request for comment. Since news of the lawsuit broke, Uniswap's UNI token has dropped nearly 2% on the day, and is currently being traded at $5.87, according to CoinGecko data.