The decentralized finance (DeFi) landscape may be heading into a pivotal courtroom battle as Bancor, one of the early pioneers of automated market maker (AMM) technology, has filed a patent infringement lawsuit against Uniswap. In a lawsuit announced on May 20, Bancor alleges that Uniswap Labs has leveraged its proprietary technology without authorization to build what is now one of the most dominant platforms in the DeFi space.
Bancor’s legal complaint, filed in the U.S. District Court for the Southern District of New York, centers around patented AMM innovations the company claims to have invented as far back as 2016. These innovations were formally recognized with two patents issued in January 2017. At the core of the dispute is the “constant product” AMM mechanism—a mathematical formula used to determine trading ratios and manage liquidity pools, which became a hallmark of Uniswap’s protocol after it launched in 2018.
Mark Richardson, the project lead at Bancor, didn’t mince words in the official statement:
“When an organization continuously uses our invention without our authorization and does so as a means of competing with us, we must take action.”
In essence, Bancor argues that while it laid the technical foundation for trustless token swaps, Uniswap capitalized on that blueprint without licensing the underlying intellectual property. The complaint also names Uniswap Foundation, alleging it induced infringement by actively promoting and benefiting from the contested technology.
So far, Uniswap Labs has not issued a public response to the lawsuit.
A Clash of Titans—But One Outpaces the Other
The timing of this legal action is notable, given the wide gap between the two platforms in terms of market traction. According to data from DefiLlama, Uniswap is currently the second-largest decentralized exchange by 24-hour trading volume, boasting an eye-watering $3.8 billion in daily transactions. Over its lifetime, Uniswap has processed a staggering $2.8 trillion in volume, cementing its status as a DeFi juggernaut.
Bancor, in stark contrast, finds itself on the fringes of the DEX landscape. With a daily trading volume hovering around $378,579, Bancor currently ranks 142nd among decentralized exchanges—far from its early promise as a trailblazer in the AMM space.
This lawsuit could serve as more than just a financial reckoning. Richardson framed the case as a stand for innovation integrity in DeFi:
“If companies like Uniswap can act unchecked, we fear it will hinder innovation across the industry to the detriment of all DeFi players.”
A Broader Industry Implication?
This case could carry wider ramifications for the decentralized finance world, where open-source ethos often clashes with intellectual property enforcement. If Bancor’s claims hold up in court, it may set a precedent for how foundational blockchain and DeFi technologies are protected—or contested—legally.
Meanwhile, Bancor is no stranger to legal headaches of its own. Earlier this year, a Texas court issued a judgment against Bancor DAO for failing to respond to a legal summons, adding a layer of irony to the current proceedings.
For now, the industry watches closely as two major DeFi forces prepare for a legal showdown that could echo throughout the blockchain world. Whether it becomes a landmark moment or a footnote in DeFi’s history depends on how the court views innovation, attribution, and the rights to profit from an idea in the permissionless world of decentralized finance.
