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Uniswap v4's four-year code patent sparks debate, developers: Don't claim to be open-source anymore

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Uniswap v4

Uniswap recently released details about v4. Similar to v3, it introduces the Business Source License (BSL) to prevent third parties from using the code for commercial purposes. However, v4's license duration is extended to four years, twice as long as v3. Uniswap Labs continuously emphasizes that the v4 code is "open-source," which has led to dissatisfaction among many developers who believe that Uniswap is confusing the definition of open source.

Quick look at the powerful features of v4: Uniswap v4: Expecting TWAMM, dynamic fees, and more

Uniswap v4 Business Source License BSL Validity Doubled

Uniswap v1 was first launched in November 2018, with v2 following in May 2020. During that year, the DeFi sector began to gain popularity, with DeFi protocols being continuously introduced, sparking a trend of token issuance.

SushiSwap, a copycat of Uniswap's code, attracted a large amount of profit-seeking funds from Uniswap by offering token rewards through liquidity mining. This led to a sudden 70% drop in Uniswap's liquidity, catching Uniswap Labs off guard.

Subsequently, Uniswap issued governance token in September of the same year to regain liquidity. A recap of the events:

  • SushiSwap challenging Uniswap, what is the latest "vampire mining attack"?

  • Uniswap issued UNI tokens and launched liquidity mining

To prevent further malicious forks, Uniswap V3 was issued with the "Business Source License" (BSL), prohibiting third parties from using it for any commercial purposes, establishing a two-year moat for the protocol.

In addition to introducing BSL, the v4 code will have its validity doubled to four years, at which point it will permanently convert to the GPL license.

This move has sparked debates within the crypto community, with some arguing that Uniswap is not qualified to emphasize its "open-source" nature.

What is the definition of open source?

According to the Open Source Initiative, OSI website, which lists 10 points, access to the code is fundamental, and v4 with the introduction of BSL seems to have difficulty meeting the open-source definition:

  • Free Redistribution: It should be freely distributable without restrictions on third parties.

  • Derived Works: It should allow modifications and derivatives.

  • No Discrimination Against Persons or Groups: It should not restrict anyone from using the software in specific fields, such as commercial areas.

Rotki Founder: Stop calling v4 open source

Lefteris Karapetsas, the founder of privacy portfolio tracker Rotki, has criticized Uniswap's actions on Twitter multiple times after the details of v4 were released. He had also complained about the same issue during the release of v3.

He believes that Uniswap Labs' claim of v4 being open-source is an insult to projects that truly build open-source software. V4 will not be permanently converted to the widely recognized GPL license until June 15, 2027.

In short, he does not mind the introduction of BSL in v4, but he urges not to publicly emphasize being open-source while establishing a moat for the code.

dYdX founder Antonio Juliano also took the opportunity to criticize, tweeting that dYdX v4 will be fully open-source with no commercial copyright restrictions, allowing anyone to freely use the code.

Uniswap Founder: Apologizes for the Terminology

Hayden Adams admitted that the wording should have been more accurate. He mentioned several points:

  1. The BSL license is still the best choice for the Uniswap community.

  2. The BSL license with conditions for conversion to GPL is different, making it closer to open-source compared to other proprietary licenses.

  3. He fully understands those who disagree with points 1 and 2.

  4. If UNI holders disagree, they can propose governance to advance the conversion date to GPL.

He urged that if developers do not wish to contribute to the code with BSL, they should not participate, but those willing to make significant contributions to v4 can apply for development grants.