Paradigm Files Amicus Brief Defending Innovation in DeFi

Yesterday, Paradigm filed an amicus brief in BProtocol Foundation v. Uniswap Labs (SDNY). The case involves patents that seek to monopolize the basic economic concept of using a mathematical formula to set exchange rates for currency trading, something that has existed for centuries, long before blockchains or crypto. Our brief explains why these claims are invalid under settled patent law, and why allowing them to stand would harm innovation in DeFi.

Why This Matters

At its core, this lawsuit isn’t really about Uniswap or even about a single patent. It’s about whether anyone should be able to claim ownership over the centuries-old concept of market making, simply because they describe it with an equation and implement it on a blockchain. Market makers have existed since the earliest stock exchanges: they provide liquidity, stand ready to buy and sell, and make sure markets function smoothly. Patent law has always drawn a bright line here: abstract ideas, fundamental economic practices, and basic math are not patentable. They are the shared infrastructure of commerce, and they belong to everyone. To let one party fence them off for predatory financial gain would be like granting someone a patent on long division or compound interest.

The Stakes for DeFi

DeFi has the potential to make financial markets more transparent, more accessible, and more resilient. As we discussed in our March study on the importance of DeFi, even large traditional financial institutions are preparing for a world where decentralized finance plays a central role in core business functions. They see the writing on the wall: open protocols lower costs, reduce counterparty risk, and enable innovation at internet speed. This view has now been echoed by no less a figure than SEC Chair Atkins, making clear DeFi is no backwater experiment – it’s the future of finance.

Decentralized exchanges like Uniswap are a key part of that story. They let anyone trade digital assets directly, without relying on intermediaries that can fail, be hacked, or extract excessive fees. Their strength comes from open-source code and transparent smart contracts, features that make the system resilient, auditable, and widely accessible. That openness is not a bug but the defining feature; it allows anyone, anywhere, to build on and improve what came before. That radical openness represents the democratizing promise of crypto, the idea that everyone can access powerful tools and trade across the globe with ease.

The patents asserted in this case point in the opposite direction. They seek to wall off shared building blocks and undermine the openness that makes DeFi and open-source technology thrive. Put bluntly, BProtocol’s attempt to cash in on an abstract idea they did not even invent risks choking off one of the most promising developments of our financial system, which is sorely in need of a technological update. To endorse the plaintiffs’ claim would be an ahistoric reading of past precedent that would fatally damage this burst of innovation, like a May frost over a blossoming field. The Court should put an end to this case before it goes any further.

Our Position

Paradigm invests in and supports open, decentralized technologies because we believe they expand what’s possible in financial markets. We filed this brief because outdated, overbroad, and rent-seeking patent claims shouldn’t be allowed to derail that progress. The law is clear that abstract ideas and mathematical formulas are not patentable. Upholding that principle is essential if we want to see continued growth, creativity, and competition.

The full amicus brief is available here.