Ethereum DEX traders surge over 70%, Uniswap monopolizes the market but faces patent litigation.

## Ethereum transactions are becoming active.

The trading activity of Ethereum on decentralized exchanges (DEX) has become active, with the number of daily active users surging to about 64,000. This is a 73% increase from approximately 37,000 on May 4, reaching a high level not seen in three months.

While the number of traders has increased, the monthly trading volume of Ethereum remains flat at about $15 billion (approximately ¥2.1665 trillion), suggesting that it is largely composed of individual investors making small trades rather than institutional investors.

Historically, movements led by individual investors often precede the revitalization of the overall market, suggesting that the Ethereum market may accelerate in the future.

Ethereum implemented the most significant network upgrade "Pectra" on the mainnet on May 7, which is considered the most important since the Merge in 2022. Improvements were made in user experience, validator operations, staking efficiency, and strengthening the integration of Layer 2.

After the upgrade, the Ethereum price, which had been sluggish due to the backdrop of the US-China trade agreement, has rapidly recovered, and as market sentiment has improved, investor interest in Ethereum trading is rising again.

The rise of Uniswap

Among DEXs, Uniswap maintains its superiority. On May 12, founder Hayden Adams announced that the platform has become the first DEX to surpass a cumulative trading volume of $3 trillion (433 trillion yen).

Uniswap accounts for 13 billion dollars (approximately 1.876 trillion yen), which is 86% of the monthly DEX trading volume of 15 billion dollars (approximately 2.1665 trillion yen) on Ethereum, capturing about 97% of traders.

One of the reasons why Uniswap boasts a high market share in the Ethereum trading market is believed to be its rapid adoption of EIP-7702, included in the Ethereum's Peculiar Upgrade. With EIP-7702, account abstraction was introduced to Ethereum, allowing externally owned accounts (EOA) to temporarily function like smart contract wallets.

Uniswap quickly responded to this EIP-7702 and announced the introduction of a unique wallet aiming for "one-click swap" across the platform. This has improved the trading experience for users.

According to data from DeFiLlama, Uniswap is currently processing a trading volume of approximately $4.4 billion (about ¥634.4 billion) per day and holds a 28% share of the DEX market.

is sued for patent infringement.

On the other hand, the decentralized finance (DeFi) protocol Bancor announced on the 20th that it has filed a lawsuit against Uniswap in the U.S. federal court for patent infringement, claiming that Uniswap has been using its technology without permission and profiting significantly from it.

The technology alleged to have infringed the patent is the foundational technology for "Constant Product Automated Market Maker (CPAMM)" that enables decentralized trading. Bancor applied for a patent regarding the CPAMM technology developed in 2016 in January 2017, obtaining two patents for this technology and its applications. That same year, Bancor launched the world's first fully decentralized exchange (DEX) equipped with this technology.

Bancor points out that Uniswap has used this patented technology without permission to build its own protocol. Since its launch in November 2018, it claims that Uniswap has continuously used CPAMM from version 1 to version 4.

Mark Richardson, the project leader of Bancor, stated the motivation for the lawsuit: "If an organization is continuously using our invention without permission and using it as a competing means, we must take action."

If companies like Uniswap can act without any responsibility and without limits, I am concerned that it will hinder innovation across the entire industry and cause damage to all DeFi players.

On the other hand, a spokesperson for Uniswap Labs claimed that the lawsuit has no basis. "The code for the Uniswap protocol has been publicly available for years, and it is truly unfortunate that such a frivolous lawsuit can be filed at a time when DeFi is gaining historic momentum," they stated.

CPAMM utilizes mathematical algorithms when adding or withdrawing resources from liquidity pools, enabling permissionless on-chain transactions. This technology has overcome the limitations of traditional exchanges and laid the foundation for DeFi.

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