The veteran DeFi protocol Bancor recently filed a patent infringement lawsuit against decentralized exchange giant Uniswap, alleging unauthorized use of its automated market maker (AMM) technology patented in 2017, sparking widespread discussion and uproar in the community. Facing Bancor's strong claims, Uniswap countered that the lawsuit is "completely groundless".
Bancor Sues Uniswap: Unauthorized Use of Core AMM Technology
According to The Block, the lawsuit was jointly initiated by the non-profit Bprotocol Foundation and developer LocalCoin Ltd., filed on May 20 in the U.S. District Court for the Southern District of New York. The complaint states that Uniswap, since launching its decentralized exchange protocol in 2018, used the core design of Bancor's pioneering "Constant Product Automated Market Maker (CPAMM)" architecture without legal authorization:
Bancor invented this automated market-making model as early as 2016, published a whitepaper, and applied for related U.S. patents in 2017, also launching the world's first DEX based on CPAMM that year. According to Bancor's press release, the technology has been granted two U.S. patents and is considered one of the fundamental pillars of the DeFi field.
Bancor: We Are the Originators of Automated Market Makers
Bancor project lead Mark Richardson stated that Uniswap has continuously used Bancor's patented technology for eight years without providing any compensation, forcing them to take legal action:
"When an organization continuously uses our invention to compete with us without authorization, we must defend our intellectual property through legal means." He added: "If companies like Uniswap can arbitrarily use others' technologies, the innovation of the entire DeFi industry will be in crisis. This is not just for ourselves, but for the healthy development of the entire decentralized financial ecosystem."
Uniswap Fights Back: Groundless and Wasteful
In response, a Uniswap Labs spokesperson countered: "This lawsuit is completely groundless, and we will vigorously defend ourselves." He pointed out that the Uniswap protocol has been entirely open-source since its release, long subjected to community review and verification, and does not involve any infringement:
"At a historic peak of DeFi, such a lawsuit is just a waste of resources and attention." Uniswap founder Hayden Adams even quipped: "This might be the stupidest thing I've ever seen."
The lawsuit has not yet determined a specific compensation amount, but its verdict could become a crucial precedent for defining patent boundaries in DeFi.
Bancor vs Uniswap: Vast Disparity in Strength
Although Bancor claims to defend its patent technology, their positions in the DeFi market show significant differences when looking at actual development outcomes.
According to defillama data, as of this writing, Uniswap's daily trading volume is nearly $4.7 billion, firmly holding the top spot as the world's largest DEX, with cumulative trading volume approaching $2.8 trillion. In contrast, Bancor's daily trading volume is only $500,000, ranking 128th, showing a stark disparity in capabilities.
This clash over technological patents and market strength is not just a legal dispute, but also reflects the new challenges and negotiations faced by the DeFi industry as it enters a mature stage. How the court ultimately determines the validity of Bancor's patents will have far-reaching implications for the boundaries of DeFi technological innovation.
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