The decentralised finance (DeFi) world is swaying after Bancor filed a bombshell lawsuit against Uniswap, accusing the industry giant of stealing its patented technology. Filed in a New York federal court, the case could reshape how innovation is protected in the open-source-driven crypto sector. Bancor claims Uniswap built its empire using intellectual property developed nearly a decade ago without permission or payment.
Clash of the DEX Titans
Bancor’s parent companies, Bprotocol Foundation and LocalCoin Ltd., allege Uniswap Labs and its foundation infringed on two U.S. patents for automated market maker (AMM) technology. The lawsuit claims Bancor pioneered the “constant product” AMM model in 2016, securing patents by 2017. This system, which uses algorithmic pools for token swaps, became the backbone of modern decentralised exchanges (DEXs). Uniswap launched its protocol in late 2018, rapidly eclipsing Bancor in market share. Bancor now argues Uniswap’s success stems directly from its patented innovation. “We must act when competitors use our technology without authorisation,” said Bancor project lead Mark Richardson.
Who Invented What?
Bancor’s timeline is specific: It filed a provisional patent in January 2017, published a whitepaper weeks later, and launched the first CPAMM-based DEX by June 2017. The patents cover methods for adjusting liquidity pool ratios using smart contracts, a process central to Uniswap’s operations. On the other hand, Uniswap’s protocol debuted in November 2018. Bancor alleges every version of Uniswap (v1 to v4) relies on its technology. Despite this, Uniswap now dominates DeFi, processing $2.8 trillion in lifetime trades compared to Bancor’s modest $378,579 in daily volume.
Uniswap Fires Back
Uniswap Labs swiftly dismissed the lawsuit as “a wasteful distraction.” A spokesperson emphasised that Uniswap’s code has been public for years, adding, “We’ll defend ourselves vigorously during this period of historic DeFi growth.” Founder Hayden Adams doubled down, calling the suit “baseless” and hinting at technical differences. “Later Uniswap versions use decentralised hooks and other features Bancor never developed,” he argued on X (formerly Twitter).
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Market Realities
The numbers tell a stark story. Uniswap ranks second among DEXs with $3.8 billion in daily trades, while Bancor sits at 142nd place. Bancor’s total value locked (TVL) has plummeted 98% since its 2021 peak to $58 million, a fraction of Uniswap’s $4.8 billion TVL. Bancor contends this gap stems from unfair competition. “Unchecked infringement harms all DeFi innovators,” Richardson said. However, critics question why Bancor waited seven years to act, given Uniswap’s 2018 debut.
Ripple Effects
This case could redefine intellectual property norms in a sector built on open-source collaboration. While patent lawsuits are rare in DeFi, Bancor’s move signals a shift toward stricter IP enforcement. A ruling in its favour might force projects to license technologies, potentially stifling the permissionless ethos that drives blockchain innovation. The lawsuit also tests recent regulatory wins. Uniswap escaped SEC scrutiny in February 2025, but courts previously dismissed a 2023 class action against it, citing jurisdictional issues. Bancor itself survived a securities lawsuit in 2024 on similar grounds.
What Comes Next
Legal experts predict a protracted battle. Bancor must prove Uniswap’s code directly copies its patents, a challenge given technical nuances. If successful, Uniswap could face hefty fines or licensing demands, impacting its profitability. Market reactions have been immediate: Uniswap’s UNI token fell 3% to $5.94 post-announcement, extending a weekly loss of 16.58%. Community sentiment remains divided. Some X users blasted Bancor for betraying DeFi’s open-source roots; others applauded its stand for inventor rights.
A Pivotal Moment for Crypto
As the case unfolds, its implications will reverberate beyond courtroom walls. Will patent protections spur innovation by rewarding creators or fragment DeFi’s collaborative spirit? The answer could determine whether the next generation of blockchain breakthroughs emerges from open experimentation or guarded labs. For now, all eyes remain on New York’s Southern District Court, where the future of decentralised finance hangs in the balance.
Written By Fazal Ul Vahab C H
