Popular decentralized exchange (DEX), Uniswap, launched its fourth version this week, which brings with it a series of new features and customizability. It also brought, however, the wrath of the open source Ethereum community.
The reason? The license they are using for v4.
Lefteris Karapetsas spoke to Decrypt about the controversy. He is an Ethereum developer, and founder of rotki, a portfolio tracker that protects user’s privacy.
“Uniswap decided to go with a Business Source License (BSL), continuing what they did with v3” he said, adding that he’s not happy with the decision. Karapetsas added “the reason is they don’t understand open source and they believe their moat is their code which is wrong.”
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Released as a Business Source License 1.1, this type of license means the code is publicly available and is allowed to be copied, modified or redistributed. It does have a limitation, however. It cannot be used for commercial or production purposes for up to four years, at which point it will convert to a General Purpose License (GPL) in perpetuity.
There are five licenses that typically come up on truly free open source projects: Permissive, the Berkeley Software Distribution (BSD) license, the Massachusetts Institute (MIT) license, the Apache license, and Copyleft.
Inventor of Total Value Locked (TVL), Scott Lewis pointed out that while Uniswap claims they open sourced v4, it’s actually a 4-year proprietary license. “If anyone else misrepresented the truth like this they would be torn to shreds," he said on Twitter. "That’s the power of being powerful.”
Uniswap Labs’ claim: “we open sourced v4” Uniswap Labs’ reality: Four Year Proprietary License. (BSL)
😂
if anyone else misrepresented the truth like this they would be torn to shreds. That’s the power of being powerful. pic.twitter.com/IhqHsJmHEw
Uniswap creator Hayden Adams and the protocol's team jumped on a YouTube livestream to discuss the controversy. Lead engineer Noah Zinsmeister thinks four years isn’t a very long time, and that [the BSL license] strikes a “reasonable balance between incentivizing innovation and giving exclusive rights to the protocol, which has precedents in 'normal' settings as well.”
“Business source license is a tax on innovation,” tweeted Gabriel Shapiro, general counsel at Delphi Labs, a Web3 research and development platform. He also pointed out that “anyone who's looked at BSL code even once, and then later codes something similar, is at a risk of catching a copyright claim.”
The licenses used in the space are, according to Shapiro, difficult to navigate. “It would be hard to find a team of devs who are both capable of coding a new AMM from scratch and have never looked at Uniswap v4 code” he tweeted.
simply put, it would be hard to find a team of devs who are both capable of coding a new AMM from scratch *and* have never looked Uniswap v4 code
this doesn't mean they infringed, but that's not enough--they need to be able to *prove* they did not infringe, which will be hard
Uniswap’s latest version introduces a new kind of smart contract called “hooks,” which allow developers to expand upon already existing liquidity pools. Lead smart contract engineer for the project, Sara Reynolds, told Decrypt the level of innovation that “hooks” brings makes it “kind of limitless” in terms of customizability.
Many in the open source community think the marketing language used upon launch is misleading. “You can’t call something open source when it’s not,” said Lefteris. He was the first to “call bull” on Uniswap on Twitter after v4 was announced. “Please use the proper terminology as this is insulting to projects actually building open source software,” he wrote.
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