SPI and DeFi Education Fund File Amicus Brief Supporting Decentralized Finance Innovation

By Miller Whitehouse-Levine

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Solana Policy Institute and the DeFi Education Fund filed an amicus brief in a critical patent lawsuit that could fundamentally reshape the future of decentralized finance (DeFi). At stake isn't just one protocol's future, it's whether patenting fundamental economic concepts can be weaponized to stifle an entire industry.

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The plaintiffs are asserting patents covering core automated market maker (AMM) concepts. The patents cover the basic price discovery mechanism—the age-old process of determining the relative value of two assets—as deployed on blockchains.

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Our brief makes a simple but powerful argument: you cannot patent concepts that have existed for millennia just because those concepts are used in a new technological paradigm. The idea of determining exchange rates between assets, bartering, is as old as commerce itself. When humans first learned to write, among their first impulses was to record the relative value of goods. And indeed, cuneiform tablets dating back to 3000 BCE—humanity's earliest known writing—recorded prices and exchange rates. 

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What the Plaintiffs’ patents attempt to do is add the phrase "on a blockchain" onto these ancient practices and claim having created something entirely new. This is exactly the type of abstract patent the Supreme Court has repeatedly rejected—just as "do it on the internet" claims were a decade ago.

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The Supreme Court's Alice decision established clear precedent: basic concepts implemented using new technologies aren't patentable innovations. Innovation must be rewarded; ancient concepts repackaged with buzzwords should not.

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Solana Policy Institute advocates for policies that enable decentralized networks to flourish while providing legal certainty for builders and users.