Bancor sues Uniswap for patent infringement. As a result, decentralized finance may no longer be shaped by the open-source approach that guided it before.

According to court documents filed in New York on May 20, Bancor says Uniswap has used its automated market maker technology for eight years without proper licensing. Thanks to smart contracts, trading through decentralized exchanges has improved with this technology.

Key-Takeaways:

• Bancor sues Uniswap for copying their patented AMM technology, threatening the tradition of open source in the DeFi market.
• The outcome can guide the future of how innovation and IP are addressed in the world of decentralized finance.

Bancor’s Approach to Patents and the Law

According to Bancor, they developed and filed a patent for the CPAMM model. This model now enables on-chain trading in DeFi to happen without the need for permission.

The original patent application was filed by Bancor on January 8, 2017, according to court documents. Later in February 2017, a white paper with full details was published.

In June 2017, Bancor introduced the world’s first decentralized exchange (DEX) based on AMM. Already, the company owned two patents for this new technology.

For the past eight years, Bancor has accused Uniswap of using its patented technology without authorization, said Mark Richardson, from Bancor. He mentioned that suing would help guard their technology and protect the DeFi community.

Uniswap Labs and the Uniswap Foundation are both part of the lawsuit. It says that Uniswap’s v4 version, the newest iteration of their protocol, still violates Bancor’s intellectual property rights.

Bancor and LocalCoin, with the Bprotocol Foundation, say they are seeking compensation for any alleged patent violations. According to them, others taking their technology for free weakens the drive to innovate in DeFi.

If organizations like Uniswap break the rules without suffering consequences, they could discourage progress in the whole industry, Richardson stated. He said that the case matters for what comes next in the world of decentralized finance.

How Different Companies Perform in the Market

Right now, Bancor and Uniswap have very different roles in the world of DeFi. Although Bancor was the first to introduce AMM, Uniswap’s rules have since led to more than $40 billion of funds being used.

DeFiLlama found that Uniswap is second in trading volume over 24 hours, processing approximately $3.8 billion worth of trading. The difference between the church’s and Schnee’s arguments shows how important this lawsuit is.

By that measure, Bancor has a 24-hour trade volume of $378,579, placing it at 142nd in the list on May 20. There is currently $58 million in value locked on Terra, down more than 98% from its highest ever in May 2021.

Such a large gap in performance reveals that the lawsuit has significant financial importance. Bancor sues Uniswap and says that Uniswap has used its patented technology without approval.

Experts point out that innovations in decentralized markets came from Bancor, but Uniswap is implementing them in ways that matter more. Since its launch, Uniswap has processed over $2.8 trillion, and it is soon approaching a $3 trillion total.

Perhaps the very different results are caused by Bancor suing Uniswap. Making a trip to court was often the end result of many straight years of losing clients.

Overview of the Regulation and Latest Developments

Bancor is joining the major IP dispute following a legal victory. In 2024, a Texas judge ended a securities case against the operators of BitConnect because the U.S. had no jurisdiction over the matter.

In the case, investors reported that Bancor’s decision to pause the impermanent loss protection program was misleading. The court was told that plaintiffs had relied on false information and invested $2.3 billion.

According to the court, Bancor’s connection to the U.S. was judged to be minimal. For this reason, it was thought that an Israeli court would be the best place for the lawsuit. As a result, Bancor obtains temporary security from U.S. securities laws and might use it to improve its current case against Lithium.

About a year after issuing a Wells notice, the U.S. Securities and Exchange Commission ended its investigation of Uniswap in February 2025. The regulatory process gave Uniswap the space to concentrate on product improvement until Bancor filed their lawsuit.

This legal case has focused attention on intellectual property challenges, even though the industry has often depended on open-source methods. Should the court rule for them as Bancor sues Uniswap, it could completely alter how future DeFi projects are created, shared, and monetized.

According to industry insiders, the outcome of the Bancor sues Uniswap case might cause DeFi to enforce intellectual property more strongly, with developers depending more on patents to secure their innovations. As a result, the business may not advance as quickly as it had before.

Should Uniswap win, it would help ensure that DeFi remains open and decentralized. Still, if their discoveries can’t be legally secured, early innovators may feel less motivated.

The case also leads to discussion about how decentralization relates to standard intellectual property laws. Even though the protocols are usually not centrally managed, the businesses creating them commonly follow normal legal regulations.

Conclusion

It is possible that the Bancor sues Uniswap lawsuit will become a key moment in DeFi’s future with regard to intellectual property. The result could have an impact on the balance between innovation, ownership, and collaboration. The choices made now may help guide the future creation of protocols.