A legal storm is brewing in the decentralized finance (DeFi) space, as Bancor has filed a lawsuit against Uniswap, accusing the industry giant of infringing on patented technology behind automated market makers (AMMs), according to a May 20 announcement.
In a court filing dated May 20 in the U.S. District Court for the Southern District of New York, Bancor claims that Uniswap Labs and the Uniswap Foundation unlawfully used its proprietary invention—the constant product AMM model—to build and profit from the Uniswap protocol. Bancor argues that this technology, developed in 2016 and patented in early 2017, was foundational to the rise of DeFi platforms and has since been replicated without permission.
“When an organization continuously uses our invention without our authorization and does so as a means of competing with us, we must take action,”
said Mark Richardson, project lead at Bancor. He added that unchecked violations like this could
“hinder innovation across the industry to the detriment of all DeFi players.”
The lawsuit alleges that Uniswap’s protocol, which launched in November 2018, directly leverages Bancor’s patented system for enabling decentralized token trades through mathematical formulas that manage liquidity pools. While Bancor seeks damages for what it calls “unlicensed use” and “inducement of infringement,” Uniswap had not issued a public response at the time of reporting.
Despite being the first to introduce the AMM model, Bancor has struggled to keep up in the competitive DeFi landscape. According to data from DefiLlama, Uniswap ranks as the second-largest decentralized exchange by daily trading volume, moving nearly $3.8 billion in 24 hours. Bancor, by contrast, is far behind at rank 142, with a daily volume of just over $378,000 as of May 20.
Uniswap has reportedly processed over $2.8 trillion in trading volume since its inception, making it a dominant force in the DeFi ecosystem.
Notably, Uniswap Labs officially launched its much-anticipated “Uniswap v4,” the latest upgrade of the popular DEX. Uniswap confirmed that v4 is now live on Ethereum, Polygon, Arbitrum, OP Mainnet, Base, BNB Chain, Blast, World Chain, Avalanche, and Zora Network.
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