Bancor launched a landmark patent lawsuit against Uniswap on May 20, accusing the dominant DEX of eight years of unauthorized use of its patented automated market maker (AMM) technology, threatening to upend DeFi’s open-source foundations and IP norms.

The lawsuit, filed in U.S. District Court for the Southern District of New York by Bancor’s nonprofit Bprotocol Foundation and original developer LocalCoin, claims Uniswap’s protocol infringes on Bancor’s 2017 patents that transformed decentralized trading, demanding damages and challenging how DeFi innovation is protected and monetized.

Legal Tussle Over AMM Patent Infringement Challenges DeFi Ethos

Central to the dispute is Bancor’s claim that it invented and patented the constant product automated market maker (CPAMM) model that powers permissionless on-chain trades through smart contracts.

Bancor noted that it filed the original patent application for its invention on January 8, 2017, and released a white paper the following month.

The Bancor Protocol, launched in June 2017, was the first DEX powered by an AMM model. Bancor was granted two patents and launched the first CPAMM-based DEX that year.

Uniswap, which launched its v1 protocol in 2018, has since grown into the dominant DEX in crypto with over $40 billion in total value locked.

Bancor now alleges that Uniswap has been infringing on its patents from the beginning and has done so without licensing, authorization, or collaboration.

“For the last eight years, Uniswap has been using our patented technology in its projects without our permission. As a result, we have taken legal action to defend our technology for the good of the entire DeFi community,” Bancor’s project lead, Mark Richardson, stated.

The plaintiffs claim that Uniswap’s most recent protocol release, v4, continues the use of the infringing CPAMM model.

Bancor and LocalCoin are seeking damages and claim that allowing such unlicensed use threatens the incentive structure for innovation across the decentralized finance industry.

“If companies like Uniswap can act unchecked without consequence, we fear it will hinder innovation across the industry to the detriment of all DeFi players,” Richardson added.

The legal challenge brings new attention to intellectual property disputes in a sector that has historically thrived on open-source principles.

Uniswap, often seen as the largest decentralized exchange, has yet to respond publicly. If the case proceeds, it could force the DeFi industry to confront questions about the role of patents and ownership over foundational blockchain technologies.

Court Clears Bancor of U.S. Charges as Uniswap Skates Past SEC Probe

As Bancor steps into a historic intellectual property battle against Uniswap, both protocols are emerging from very different regulatory backdrops.

In September 2024, a Texas federal judge dismissed a securities class action lawsuit filed against Bancor’s operators, citing a lack of U.S. jurisdiction.

The plaintiffs had accused Bancor of misleading investors with its now-suspended impermanent loss protection program, claiming over $2.3 billion was drawn into the protocol under false promises.

But the court found Bancor’s ties to the U.S. too weak, pointing instead to Israel as a more appropriate venue for legal action. The ruling effectively shields Bancor from U.S. securities laws, at least for now.

Meanwhile, Uniswap Labs secured a major win of its own. In February 2025, the U.S. Securities and Exchange Commission dropped its investigation into the firm, nearly a year after issuing a Wells notice.

Bancor now has TVL at $58 million, 98% below its peak in May 2021, according to DeFiLlama.

However, Uniswap is now commanding 23% of daily DEX volume and celebrating a $3 trillion all-time milestone. The coming patent war is shaping up not just as a legal fight but as a defining moment for DeFi’s future.

The post Bancor Launches Historic Patent War Against Uniswap – Could This $40B DEX Battle Redefine DeFi IP Rights? appeared first on Cryptonews.

Highlights How Bancor’s Invention Revolutionized Decentralized Finance by Making a Fully Functional Decentralized Exchange a Reality

Shows That Uniswap Has Been Infringing Bancor’s Patents and Seeks Damages

Zug, Switzerland, May 20, 2025 — Bprotocol Foundation, a non-profit foundation dedicated to promoting the development and adoption of the Bancor Protocol, and LocalCoin Ltd. (“LocalCoin”), the original developer of the Bancor Protocol, today announced that they have filed a lawsuit in the United States District Court for the Southern District of New York (the “Court”) against Uniswap Labs and Uniswap Foundation (collectively, “Uniswap”) for infringing Bancor patents directed to smart contract structures and technologies that enable decentralized trading. Bprotocol Foundation and LocalCoin are seeking damages for Uniswap’s unauthorized use of their patented technology, which is the fundamental technology that underlies the constant product automated market maker (“CPAMM”) powering the Uniswap Protocol.

Invented in 2016, Bancor’s revolutionary technology was designed to replace the traditional order books and market makers of centralized exchanges using a smart contract structure that acts as an “automated market maker” for decentralized platforms. Bancor filed a patent application for the technology on January 8, 2017, and used the smart contract structure to build the Bancor Protocol, the first fully decentralized exchange powered by automated market makers.

Mark Richardson, Project Lead at Bancor, commented:

“Bancor’s patented technology is one of the most important innovations in blockchain, and we are exceptionally proud of the role it has played in revolutionizing the world of decentralized finance. By making decentralized exchanges a reality, Bancor’s invention has forever changed how cryptocurrencies are traded. Since developing this technology, Bancor’s mission has always been the same: to bring innovative inventions to DeFi that push the boundaries of what’s possible.

However, when an organization continuously uses our invention without our authorization and does so as a means of competing with us, we must take action. For the last eight years, Uniswap has been using our patented technology in its projects without our permission. As a result, we have taken legal action to defend our technology for the good of the entire DeFi community.

As innovators and inventors, protecting our intellectual property is fundamental to the health of the ecosystem. If companies like Uniswap can act unchecked without consequence, we fear it will hinder innovation across the industry to the detriment of all DeFi players.”

Key Facts:

• In 2016, Bancor invented the smart contract structures that enable buyers and sellers to transact in a liquid and reliable manner without the need for a centralized intermediary.
• On January 8, 2017, Bancor filed a provisional patent application describing its innovative technology and associated smart contract structures employing such technology. The application was filed with the U.S. Patent Office and subsequently led to two issued patents.
• Bprotocol Foundation and LocalCoin own all rights related to the invention, and Bancor released a white paper explaining the invention in February 2017.
• The Bancor Protocol was built using the invention and launched on June 12, 2017. It was the first fully decentralized exchange (DEX) powered by automated market makers, specifically the first implementation that has come to be known as CPAMM.
• Uniswap Labs later used the patented invention to create its own competing protocol — the Uniswap Protocol.
• In November 2018, Uniswap Labs launched v1 of the Uniswap Protocol and has continually operated an infringing CPAMM via the Uniswap Interface since that time, most recently announcing the launch of v4 of the Uniswap Protocol.
• Uniswap Labs has used the patented invention without authorization, license or partnership from Bprotocol Foundation or LocalCoin, and has profited greatly.
• With this lawsuit, Bprotocol Foundation and LocalCoin seek compensation for Uniswap Labs’ unlicensed use of Bancor’s patented technology and Uniswap Foundation’s inducement of infringement.

About Bancor

Bancor has always been at the forefront of DeFi innovation, beginning in 2017 with the invention of bonding curves, pool tokens, and the exchange systems which emerge therefrom. Bancor revolutionized the world of DeFi by launching the Bancor Protocol, the first fully decentralized exchange powered by automated market makers. Learn more at bancor.network.

About Bprotocol Foundation

Bprotocol Foundation is a non-profit organization dedicated to promoting the development and adoption of the Bancor Protocol. Founded in 2017, the foundation has a mandate to safeguard the Bancor community and its interests.

About LocalCoin

LocalCoin is a digital asset laboratory and software development company building innovative products ranging from blockchain infrastructure to fully integrated consumer applications. It is the original developer of the Bancor Protocol.

Media Contacts

Longacre Square Partners
Greg Marose / Kate Sylvester, 646–386–0091
bprotocol@longacresquare.com