Uniswap sued by patent holders over DeFi technology
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Homepage > News > Business > Uniswap sued by patent holders over DeFi technology The developer behind decentralized exchange Bancor has claimed IP rights over the core technology underpinning the entire DeFi industry in a new suit aimed at fellow decentralized Uniswap. The lawsuit, filed in New York by the entities that own Bancor, claims to own two patents that the plaintiffs say were the first smart contract designs which could “allow any buyer or seller to transact in a liquid and reliable manner” in a decentralized environment. As a result, the lawsuit alleges that Uniswap—the second-largest decentralized exchange and seventh-largest exchange overall by volume—is infringing their intellectual property rights on a massive scale. “The invention replaced the order books and market makers of centralized exchanges with a novel system of smart contracts that acts as an ‘automatic market maker’ for decentralized platforms. “The solution – one of the most important innovations in crypto – is now widely used, including most prominently at the core of the Uniswap Protocol.” The patents are U.S. patent numbers 11107049 and 11574291, both titled ‘Methods for exchanging and evaluating virtual currency.’ According to Bancor, the patents describe a solution to the challenges of creating a decentralized exchange, particularly about their ability to determine the value of assets without a middleman. As the lawsuit describes: “’Traditionally, value of a currency is determined by the price of a transaction between willing parties,’ but ‘employing this method on an unlimited variety of token types is not viable… In addition, many freshly issued Token types have only a limited trading volume or none at all,’ which ‘will increase the difficulties entailed in evaluating an unlimited variety of Token types via a FOREX method.’” “The asserted patents then introduce the implementation of a CPAMM [constant product automatic market maker] using smart contracts and explain that ‘the inventive method allows determining a…
Filed under: News - @ May 26, 2025 11:29 am