Bancor sued Uniswap for eight years of infringement of AMM patents and was hit back: wasting resources

The established DeFi protocol Bancor recently filed a patent infringement lawsuit against the DEX leader Uniswap, accusing it of unauthorized use of the AMM technology that Bancor applied for and obtained patent protection in 2017, sparking discussions and outrage within the community. In response to Bancor's strong assertions, Uniswap retorted that the lawsuit is "baseless."

Bancor sues Uniswap: unauthorized use of core AMM technology

According to a report by The Block, this lawsuit was jointly filed by Bprotocol Foundation, a non-profit organization behind Bancor, and developer LocalCoin Ltd., submitted to the United States District Court for the Southern District of New York on May 20.

The complaint states that Uniswap, which launched its decentralized trading protocol in 2018, has core designs that adopted the "constant product AMM (CPAMM)" framework created by Bancor, but has never obtained legal authorization:

Bancor invented the AMM model in 2016 and released a white paper and applied for relevant US patents in 2017. That year, it also officially launched the world's first DEX (Decentralized Exchange) based on CPAMM.

According to a press release issued by Bancor, the technology has been granted two patents in the United States and can be said to be one of the cornerstones of the DeFi field.

Bancor: We are the creators of the AMM.

Bancor project leader Mark Richardson stated that Uniswap has been continuously using Bancor's patented technology for eight years without providing any compensation, thus they had to take action:

When an organization continues to use our invention to compete with us without authorization, we have to defend our intellectual property rights through legal means.

It is also added that "if companies like Uniswap can freely use other people's technology, the entire DeFi industry's innovation will fall into crisis."

This is not just for ourselves, but for the healthy development of the entire Decentralized Finance ecosystem.

Uniswap strikes back: baseless and a waste of resources

In response, a spokesperson for Uniswap Labs countered, stating: "This lawsuit is baseless, and we will defend ourselves vigorously." They pointed out that the source code of the Uniswap protocol has been fully open-source since its launch, and has been subjected to community scrutiny and verification for many years, with no issues of infringement involved:

At this historic peak in Decentralized Finance, such lawsuits are merely a waste of resources and attention.

Uniswap founder Hayden Adams joked, "This might be the dumbest thing I've ever seen."

On-chain developer @controlcthenv replied

The specific amount of damages in the current lawsuit has not yet been determined, but the ruling in this case will still lay the foundation for patent definitions in the Decentralized Finance field.

Bancor vs Uniswap: A Comparison

Although Bancor claims to defend its patented technology, there is a significant gap in the status of both in the Decentralized Finance market based on actual development results.

DefiLlama data shows that as of the deadline, Uniswap, with a daily trading volume of nearly 4.7 billion USD, firmly holds the position of the world's largest DEX; its cumulative trading volume has approached 2.8 trillion USD since its inception. In contrast, Bancor's trading volume on that day was only 500,000 USD, ranking 128th, which can be said to be a significant disparity in strength.

This battle of technological patents and market strength is not just a legal dispute; it also reflects the new challenges and games that decentralized finance faces as it enters a mature stage. How the courts will recognize the validity of Bancor's patents in the future will be an important precedent that affects the boundaries of DeFi technological innovation.

This article reports that Bancor is suing Uniswap for eight years of infringement on AMM patents, facing backlash: a waste of resources, first appeared in Chain News ABMedia.