Bprotocol Foundation and LocalCoin Ltd., which are focused on the well-being of the Banco Protocol, filed a lawsuit in the United States District Court for the Southern District of New York against Uniswap Labs (UNI). According to the announcement, the lawsuit seeks to compel Uniswap Labs to compensate the Bancor network for using its algorithmic technology used to enable decentralized exchanges for the past eight years.
“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,” Mark Richardson, Project Lead at Bancor, noted.
The Bancor protocol team has accused Uniswap Labs of benefiting from its invention without authorization, partnership, or profit sharing. Hayden Adams, the founder of Uniswap protocol, downplayed the lawsuit as baseless.
“Possibly the dumbest thing I’ve ever seen. I look forward to not thinking about this again until a lawyer tells me we won,” Hayden noted.
The patent infringement lawsuit against Uniswap Labs will likely negatively impact other decentralized exchanges based in the United States if Bancor Protocol wins the case. However, Uniswap Labs is well positioned to fight the case and possibly argue that the algorithms used in its four versions are different from what Bancor patents claim.
Furthermore, the Uniswap protocol has evolved over the years to enable users to provide liquidity in decentralized hooks, which are not native to Bancor protocol.
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