Originally Published June 2021
A Binance Smart Chain project has used Uniswap V3’s source code for its exchange, disregarding the business source license protecting the DEX’s code.
Anonymous developers have launched a fork of Uniswap V3 on Binance Smart Chain, defying the business source license that restricts any use of the source code for two years.
HolaSwap Breaks Uniswap V3 Copyright
HolaSwap has used Uniswap’s V3 source code despite a business source license that protects the use of the code for the next two years. The project has launched on Binance Smart Chain, a Binance-owned blockchain that replicates some aspects of Ethereum. The code can be viewed on BscScan.
It’s not the first time that another project has cloned Uniswap’s code. At the peak of last year’s DeFi summer last year, the pseudonymous developer Chef Nomi forked Uniswap V1 to launch SushiSwap. The project introduced the SUSHI governance token and incentivized Uniswap liquidity providers to stake their tokens on the protocol. Uniswap users who brought liquidity over to SushiSwap earned generous SUSHI rewards. The move enabled SushiSwap to siphon a large chunk of Uniswap’s liquidity.
Not long after the “vampire attack,” Uniswap launched its own UNI token. The two projects have been the leading DEXs in the Ethereum ecosystem since then.
Uniswap’s team appeared intent on preventing another project from copying the code it had used following SushiSwap’s launch. Uniswap V3 was unveiled in March and introduced a business source license that implements a time delay for commercial use of the code for up to two years. Announcing the V3 update, Uniswap wrote:
“We strongly believe decentralized financial infrastructure should ultimately be free, open-source software. At the same time, we think the Uniswap community should be the first to build an ecosystem around the Uniswap v3 Core codebase.”
The license protects the rights of the original developers by copyrighting the software and issuing a license that gives legal permission to copy, distribute, or modify the code.
The HolaSwap developers have eliminated a governance token, possibly as a way to circumvent commercial use of the product. However, the license only allows for “non-production use of the code.”
Uniswap and other Ethereum DEXs are unlikely to be affected by the Binance Smart Chain project. It’s one of the few exchanges that doesn’t incorporate a governance token for yield farmers. But it’s not unlikely that Uniswap V3 could get cloned again in the future.
Uniswap V3 is designed to help liquidity providers by improving capital efficiency up to 4,000 times. It’s planning to launch on the Optimistic Rollup solutions Arbitrum and Optimism, which will likely reduce transaction costs and potentially move liquidity from Binance Smart Chain projects like PancakeSwap and HolaSwap.
Binance Smart Chain may also suffer from users migrating to Ethereum and other chains as a result of the various attacks affecting projects on the network. BurgerSwap, Uranium Finance, Meerkat Finance, and Bunny Finance have all suffered attacks in recent weeks, resulting in millions of dollars worth of losses for users.
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