The veteran DeFi protocol Bancor recently filed a patent infringement lawsuit against the DEX leader Uniswap, accusing it of unauthorized use of the automated market maker (AMM) technology that Bancor applied for and obtained patent protection in 2017, sparking community discussions and uproar. In response to Bancor's strong claims, Uniswap countered that the lawsuit is 'baseless.'

Bancor sues Uniswap: Unauthorized use of core AMM technology

The Block reported that this lawsuit was jointly filed by the non-profit organization Bprotocol Foundation, which is behind Bancor, and developer LocalCoin Ltd., submitted to the U.S. District Court for the Southern District of New York on May 20.

The lawsuit states that Uniswap's decentralized trading protocol launched in 2018 has core designs that adopted the 'Constant Product Automated Market Maker (CPAMM)' framework pioneered by Bancor, yet it has never obtained legal authorization.

Bancor invented this automated market-making model in 2016 and published a white paper and applied for relevant U.S. patents in 2017. That year, it also officially launched the world's first DEX (decentralized exchange) based on CPAMM.

According to a press release from Bancor, the technology has been granted two patents in the United States, making it one of the cornerstones of the DeFi field.

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

Mark Richardson, the head of the Bancor project, stated that Uniswap has been continuously using Bancor's patented technology for eight years without providing any compensation, thus forcing them 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.

He added, 'If companies like Uniswap can arbitrarily use the technology of others, the entire DeFi industry's innovation will be in crisis.'

This is not just for ourselves, but for the healthy development of the entire decentralized finance ecosystem.

Uniswap's rebuttal: baseless and a waste of resources.

In response, a spokesperson for Uniswap Labs countered, saying, 'This lawsuit is baseless, and we will defend ourselves vigorously.' They pointed out that the original code of the Uniswap protocol has been fully open-source since its launch, subjected to community scrutiny and verification, and is unrelated to infringement issues.

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

Uniswap founder Hayden Adams jokingly said, 'This may be the dumbest thing I've ever seen.'

Source: Chain News Chain Developer @controlcthenv replied

Currently, the lawsuit has not yet determined a specific amount of damages sought, but the ruling on this case will lay the foundation for the definition of patents in the DeFi field.

Bancor vs Uniswap: A stark contrast

Although Bancor claims to defend its patented technology, the actual development results show a significant gap in the positions of both in the DeFi market.

Source: Chain News

Data from DefiLlama shows that as of the time of writing, Uniswap, with a daily trading volume of nearly $4.7 billion, firmly holds the top position among DEXs globally; its cumulative trading volume since inception has reached nearly $2.8 trillion. In contrast, Bancor's trading volume on the same day was only $500,000, ranking 128th, indicating a stark disparity in strength.

This contest of technological patents and market strength is not just a legal dispute; it also reflects the new challenges and games faced by decentralized finance as it enters a mature stage. How the court recognizes the validity of Bancor's patent will be an important precedent affecting the boundaries of DeFi technological innovation.

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'Veteran DeFi Accuses Uniswap of Infringement! Was Bancor's AMM Patent Stolen? How Did the Officials Respond?' This article was first published on 'Crypto City.'