Bancor Takes Uniswap to Court Over Alleged Patent Infringement

Bancor, through its entities Bprotocol Foundation and LocalCoin, has filed a lawsuit against Uniswap Labs and the Uniswap Foundation, alleging patent infringement over the use of constant product automated market maker (CPAMM) technology. This legal battle, filed in the United States District Court for the Southern District of New York, could have profound implications for the decentralized finance (DeFi) ecosystem.

• Bancor sues Uniswap for CPAMM patent infringement
• Lawsuit filed in New York’s Southern District Court
• Potential impact on DeFi’s intellectual property landscape

On May 20, 2025, Bancor launched its legal action, claiming that Uniswap has been using its patented CPAMM technology without permission. CPAMMs are algorithms that automatically facilitate token swaps by maintaining a balance between different cryptocurrencies. Bancor’s patent, filed in 2017 and invented in 2016, covers this critical technology. They argue that Uniswap has been leveraging this innovation since the launch of Uniswap v1 in November 2018.

Uniswap has been on a meteoric rise, recently surpassing $3 trillion in cumulative swap volume and holding a total value locked (TVL) of over $5.052 billion across multiple chains. It commands a 67% share of the Ethereum decentralized exchange (DEX) market, showcasing its dominance. However, this success is now under legal scrutiny. Bancor’s press release stated,

“When an organization continuously uses our invention without our authorization and does so as a means of competing with us, we must take action.”

Meanwhile, Hayden Adams, Uniswap’s founder, took to social media to dismiss the lawsuit as a “costly distraction,” expressing confidence in Uniswap’s legal standing.

This lawsuit could set a precedent for how intellectual property disputes are resolved within the blockchain and cryptocurrency industry. In a sector where open-source technology and community collaboration are the norm, this case raises critical questions about the balance between fostering innovation and protecting proprietary rights. Mark Richardson, Project Lead at Bancor, warned,

“Unchecked actions by companies like Uniswap could hinder innovation across the industry.”

CPAMM technology is at the heart of many DeFi platforms. It ensures that token swaps can happen automatically without the need for a traditional order book. This technology has been crucial in making DeFi more accessible and efficient. However, the patenting of such technology raises questions about how open-source principles can coexist with intellectual property rights.

The broader DeFi ecosystem watches closely, as the resolution of this case could influence how other platforms approach innovation and intellectual property moving forward. As for Bancor and Uniswap, their rivalry in the courtroom may redefine the rules of the game for decentralized exchanges. The tension between protecting innovation and fostering a collaborative environment is a delicate dance that could shape the future of DeFi.

While Uniswap’s market cap stands at $3.702 billion and its fully diluted valuation at $6.166 billion, the platform’s growth trajectory suggests a bright future. Yet, the lawsuit from Bancor casts a shadow over this optimism, highlighting the delicate balance between fostering technological advancement and respecting intellectual property rights in the DeFi world.

In the world of DeFi, it seems the only thing more automatic than the market makers is the legal action against them. As this legal drama unfolds, it’s clear that the stakes are high, not just for Bancor and Uniswap, but for the entire DeFi community. Will this case stifle innovation, or will it lead to a clearer understanding of how to protect and share ideas in this fast-paced industry? Only time will tell.

Key Takeaways and Questions

• What is the lawsuit about?

  Bancor is suing Uniswap for allegedly using its patented technology for constant product automated market makers (CPAMMs) without permission.

• When was the lawsuit filed?

  The lawsuit was filed on May 20, 2025.

• Which court is handling the case?

  The United States District Court for the Southern District of New York is handling the case.

• What technology is at the center of the dispute?

  The technology in question is the constant product automated market maker (CPAMM), patented by Bancor in 2017.

• How successful has Uniswap been recently?

  Uniswap has seen tremendous growth, surpassing $3 trillion in cumulative swap volume and boasting a total value locked (TVL) of over $5.052 billion.

• What are the potential impacts on DeFi?

  The lawsuit could set a precedent for intellectual property disputes in DeFi, potentially affecting how other platforms approach innovation and IP rights.

• What is the role of CPAMM technology in DeFi?

  CPAMM technology automates token swaps, making DeFi more accessible and efficient by eliminating the need for traditional order books.