Uniswap, a popular decentralized exchange (DEX), has unveiled its fourth version which, while feature-heavy, has sparked complaints among developers who oppose the business source license that protects its code for the next four years.
Uniswap V4 features include “hooks”
Uniswap v4 brings a host of new features and improved customizability to the platform. The latest release introduces “hooks,” a type of smart contract that allows developers to expand on existing liquidity pools.
Sarah Reynolds, the project’s lead smart contract architect, described the Hooks feature as “limitless” in terms of customization possibilities.
However, the release of Uniswap v4 also raised complaints within the open source community. The reason is their aversion to the license used with the new update.
Uniswap chose to use the Business Source License 1.1 (BSL) in v4, continuing what they did with Uniswap v3. The BSL license will allow Uniswap to use their innovations exclusively for the next four years.
Although the license gives the public access to the code and allows the code to be copied, modified, and redistributed, the code cannot be used for commercial or production purposes for up to four years. After this initial period, the license will be changed from a BSL license to a General Purpose License (GPL) forever.
Crypto developers within the open source community argue that Uniswap’s marketing claims of being open source are misleading.
Implications for the Uniswap V4 license
in a series of TweetsGabriel Shapiro of Delphi Labs, a research and development lab accelerating Web 3 products, said that BSL is a tax on innovation and can slow development in the field of decentralized finance (DeFi). In his opinion, it would be difficult for developers to build an automated market maker (AMM) from scratch without “looking at Uniswap v4 code”.
Work Source Licensing is a tax on the innovation of the entire space. Anyone who has seen BSL code even once, and later coded something similar, is at risk of getting a copyright claim. These copyright claims risks are why big tech uses “clean room” procedures. Simply put, it would be hard to find a team of developers who are able to code a new AMM from scratch and have never looked at Uniswap v4 code. This does not mean that they have violated, but it is not enough, they must be able to prove that they have not violated.
In response to the backlash, Uniswap creator Hayden Adams and his team held a YouTube livestream to address the controversy.
Noah Zensmeester, lead engineer, defended the BSL license, claiming that four years is not a long time and that it strikes a reasonable balance between encouraging innovation and benefiting the project.
Featured image from Canva, chart from TradingView