Original Title: "Bancor sues Uniswap for eight years of infringement on AMM patents, faces backlash: a waste of resources"

Original author: Crumax, Chain News

The longstanding DeFi protocol Bancor recently filed a patent infringement lawsuit against the decentralized exchange giant Uniswap, accusing it of using Bancor's automated market maker (AMM) technology, which was applied for patent protection in 2017, without authorization. This has sparked widespread discussion and uproar in the community. In response to Bancor's strong claims, Uniswap countered that the lawsuit is "baseless."

Bancor Sues Uniswap: Unauthorized Use of Core AMM Technology

According to The Block, the lawsuit was initiated by the Bprotocol Foundation, the nonprofit behind Bancor, and developer LocalCoin Ltd., and was filed in the U.S. District Court for the Southern District of New York on May 20. According to the complaint, Uniswap has been a decentralized trading protocol since 2018, and its core design adopts the "Constant Product Automated Market Maker (CPAMM)" architecture pioneered by Bancor, but it has never been legally authorized:

Bancor invented the automated market-making model as early as 2016, published a white paper, applied for relevant U.S. patents in 2017, and officially launched the world's first CPAMM-based DEX (decentralized exchange) that year. According to a press release issued by Bancor, the technology has been granted two patents in the United States and is arguably one of the key cornerstones in the DeFi space.

Bancor: We are the original creators of automated market makers.

Mark Richardson, the project leader of Bancor, stated that Uniswap has continuously used Bancor's patented technology for eight years without ever providing any compensation, thus having to resort to legal measures:

"When an organization continuously uses our inventions to compete with us without authorization, we have to defend our intellectual property through legal means." He added, "If companies like Uniswap can freely 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 finance ecosystem."

Uniswap Strikes Back: Unfounded and Wasteful Resources

In response, a spokesperson for Uniswap Labs countered, stating: "This lawsuit is baseless, and we will vigorously defend ourselves." He pointed out that the Uniswap protocol has been fully open source since its launch, subject to community review and verification for a long time, and does not involve any infringement issues.

"As DeFi reaches historic peaks, such lawsuits are just a waste of resources and attention." Uniswap founder Hayden Adams jokingly remarked, "This might be the dumbest thing I've ever seen."

The specific amount of compensation in the current lawsuit has not yet been determined, but the ruling in this case may become an important precedent for defining the boundaries of DeFi patent rights.

Bancor vs Uniswap: A Disparity in Strength

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

According to DefiLlama data, as of press time, Uniswap's daily trading volume is close to $4.7 billion, ranking first in the world. Since its inception, the cumulative trading volume has approached $2.8 trillion. Bancor, on the other hand, traded only $500,000 on the day, ranking 128th, with a huge disparity in strength.

This confrontation over technology patents and market power is not just a legal dispute; it also reflects the new challenges and games that the DeFi industry faces as it enters a mature stage. How the courts will determine the validity of the Bancor patent in the future will have a profound impact on the boundaries of DeFi technological innovation.

Appendix: A Comprehensive Analysis of the U.S. Stablecoin Bill "GENIUS Act"

As stablecoins gradually become an important tool for dollar payments and settlements, the U.S. Congress recently introduced the "GENIUS Act" (Guiding and Establishing National Innovation for U.S. Stablecoins Act), aimed at establishing a compliance framework that coordinates federal and state governments by clearly defining the issuance conditions, reserve requirements, and regulatory mechanisms for "payment stablecoins."

Core Concept of the 《GENIUS Act》: Regulates only "payment stablecoins"

The bill clearly limits the regulatory target to "Payment Stablecoins," defined as follows: "digital assets that are promised by the issuer to be redeemed at a fixed amount of fiat currency and maintain a stable exchange rate."

Exclude the following types:

· Fiat currency itself (e.g., US dollar)

· Bank deposits (even if recorded on the blockchain)

· Financial Securities Assets

· Decentralized stablecoins and algorithmic stablecoins (such as DAI, FRAX)

Who can issue payment stablecoins?

Only the following three types of institutions are authorized to issue regulated payment stablecoins:

1. Federal regulatory banks or their subsidiaries

2. Non-bank institutions approved by the OCC (Office of the Comptroller of the Currency)

3. Issuers approved by the provincial government (assets below 10 billion USD)

Other unlicensed institutions are prohibited from issuing or selling payment stablecoins to U.S. users after a three-year grace period.

Reserve Requirement: 1:1 cash or equivalent assets, no further pledging allowed

The issuer must hold equivalent reserves, including:

· Cash in US dollars and deposits in Federal Reserve accounts

· Insured by FDIC for demand deposits

Short-term U.S. Treasury bonds maturing within 93 days

· Government Money Market Fund

· Eligible repurchase agreements or tokenized government bond assets

Rehypothecation is prohibited unless for liquidity needs or permitted purposes.

Reporting and Compliance Obligations: Public, Transparent, and Audited

All compliant issuers must:

· Monthly public reserve composition and issuance volume

· Accept registered accountant audit

· CEO signs authenticity certification with CFO

· If the issuance scale exceeds 50 billion U.S. dollars, the annual financial report must be prepared and disclosed in accordance with GAAP standards.

· Comply with the Bank Secrecy Act (BSA) and anti-money laundering regulations

Exception Clause: Safeguarding User Freedom and Privacy

The following situations are not governed by this law:

· Peer-to-Peer Asset Transfer (P2P)

· Transferring stablecoins between accounts of the same person domestically and internationally

· Self-custody wallet operation (hardware/software wallet)

Dual-track State and Federal Regulation

State-level issuers with less than $10 billion in assets can maintain state regulation, subject to approval by the federal Stablecoin Review Committee. After the $10 billion threshold is exceeded, it must be subject to federal regulation or stop the issuance.

Core Objective: Stable Payment System, Cutting into DeFi Space

The aim of the bill is to create compliant "payment infrastructure", distinguishing it from DeFi or algorithmic models. It does not intend to eliminate all stablecoins, but rather to establish a standard for "safely redeemable" payment-type stablecoins to prevent systemic collapse risks (such as Terra/UST).

DAI and FRAX are not under regulatory oversight, but the exchange policies are worth paying attention to.

Although decentralized stablecoins like DAI are not subject to the regulation of this bill, if in the future U.S. exchanges or payment platforms only support compliant stablecoins, it could still have an indirect impact on these assets.

Risk Warning: Cryptocurrency investments carry a high level of risk, and their prices may fluctuate dramatically. You may lose your entire principal. Please assess the risks carefully.

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