Uniswap defends business source licensing choice amid criticism Uniswap defends business source licensing choice amid criticism
Uniswap DEX had come under heavy criticism from the crypto community for labeling its V4 as open source.
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Updated: Jun. 15, 2023 at 5:30 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Decentralized exchange Uniswap (UNI) defended its Business Source Licensing (BSL) choice for its V4 in a June 14 Youtube video.
Uniswap Labs Engineering lead Noah Zinsmeister argued that making the source code BSL-protected is a balance between incentivizing innovation and giving exclusive proprietary rights for a short time, as the code will become General Public License (GPL) in four years.
“The sort of proprietary license or the non-open source aspect of the USL is really just intended to prevent the very low effort forks that are honestly kind of not bringing value to anyone.”
The DEX had come under heavy criticism from the crypto community for labeling its V4 as open source when BSL protected it. Uniswap V4 introduces the “hooks” feature that customizes liquidity pools and makes them more dynamic. The V4 also integrates architectural improvements to accommodate the diversity of pools, among other improvements.
An open-sourced project is one whose source code is available to the public to inspect, modify, and enhance without encountering any legal challenge. Uniswap’s V4 is protected by the business source license, limiting source code use in a commercial or production setting for up to four years.
This licensing poses copyright issues, defeating the purpose of open source.
Community criticizes open-source claims
Rotkiapp founder Lefteris Karapetsas dismissed the open-source label, urging the DEX to use the correct terminology and not insult open-source projects. “Uniswap v4 is not open source even though the V4 periphery is,” Karapetsas added.
Gabriel Shapiro, the general counsel at Delphi Labs, described BSL as a “tax on innovation of the entire space” because anyone who looks at the code and then codes something similar can be at risk of copyright claim.
Shapiro further noted that other projects’ failure to protect their code with copyleft licenses is an advantage for Uniswap. But Uniswap now protecting the same ideas it got for free from others shows the need for more projects that want to open source their code and also to use a copyleft license.
A crypto enthusiast Amir said:
“BSL-licensed software does not meet the Open Source Initiative’s definition of open-source software until it transitions to an OSI-approved license. Labeling a BSL-licensed project as “open-source” from the beginning could be misleading, despite the transparency provided by code visibility.”
Meanwhile, Uniswap founder Hayden Adams explained that the protocol was building its V4 in public because previous versions were developed entirely in private, and the code was frozen before they announced it.
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Since its inception, the Uniswap Protocol (“Uniswap”) has served as a trustless and highly decentralized financial infrastructure.
Designed with simplicity in mind, the Uniswap protocol provides an interface for seamless exchange of ERC20 tokens on Ethereum.
Hayden Adams is the inventor of Uniswap Protocol, an open-source protocol for providing liquidity and trading ERC20 tokens on Ethereum.