Uniswap Hit With Lawsuit Over DEX Tech: Is Its Core Model At Risk?
- Bprotocol Foundation and LocalCoin have filed a lawsuit against Uniswap in a New York federal court.
- The plaintiffs allege that Uniswap has used Bancor’s patented CPAMM technology without authorization for years.
- Bancor claims it created and patented the constant product automated market maker model in early 2017.
Uniswap faces a new legal challenge as the Bprotocol Foundation and LocalCoin file a lawsuit in New York federal court. The case alleges that Uniswap has used patented decentralized exchange (DEX) technology developed by Bancor without authorization. The lawsuit raises questions about intellectual property rights surrounding constant product automated market makers, or CPAMMs.
Bprotocol Foundation Targets Uniswap’s Use of CPAMM
The Bprotocol Foundation claims that Uniswap’s platform operates using the CPAMM structure created by Bancor in 2016. With order books replaced, this model makes automated trading a key feature of DEXs today. According to Bprotocol, a provisional patent helped secure the technology in early 2017.
Bprotocol and LocalCoin designed and introduced the Bancor Protocol, which brought CPAMM trading to decentralized finance. According to court documents, this design remains foundational to how Uniswap’s protocol executes token swaps. The plaintiffs argue that Uniswap replicated these mechanisms without licensing or credit.
The filing in the U.S. District Court for the Southern District of New York means this is a serious legal challenge for the DeFi community. Bprotocol maintains that the infringement spans several years and affects Uniswap’s core architecture. The lawsuit also emphasizes Bancor’s importance in creating systems for liquidity provision on the blockchain.
LocalCoin Accuses Uniswap of Gaining Unfair Advantage
LocalCoin, the original developer behind Bancor, joins Bprotocol in pursuing damages against Uniswap for unlicensed use of the CPAMM model. The lawsuit alleges that this usage allowed Uniswap to gain a major competitive edge within the DeFi market. LocalCoin states that this benefit was developed without giving credit or payment to the founders.
The plaintiffs argue that Uniswap’s success has come partly from implementing patented features without a licensing agreement. They say the violation negatively affected Bancor’s ability to grow and succeed within the DEX market. They are suing for damages and asking for preventive actions.
They both suggest that this case is not only about lost money but also relates to how decentralized innovation is recognized. The plaintiffs placed great emphasis on defending intellectual property as blockchain is developed. The filing is unusual in this field because it affirms patent rights in an area mainly using open-source protocols.
Team Defends Open Access to Protocol
Uniswap Labs responded by dismissing the lawsuit as meritless and stating that its protocol has remained publicly accessible since launch. They say the lawsuit will not interfere with their operations and describe it as something pulling focus from their hot DeFi sector. Uniswap emphasized its commitment to transparency and innovation.
The Uniswap Foundation also stated it would support the legal defense and reaffirmed its stance on open-source development in decentralized finance. The firm confirmed again that CPAMM is a legal mechanism that can be used without breaking any enforceable patents. It plans to continue with development even as it manages legal issues.
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