  We present FairTraDEX, a decentralized exchange (DEX) protocol based on
frequent batch auctions (FBAs), which provides formal game-theoretic guarantees
against extractable value. FBAs when run by a trusted third-party provide
unique game-theoretic optimal strategies which ensure players are shown prices
equal to the liquidity provider's fair price, excluding explicit,
pre-determined fees. FairTraDEX replicates the key features of an FBA that
provide these game-theoretic guarantees using a combination of set-membership
in zero-knowledge protocols and an escrow-enforced commit-reveal protocol. We
extend the results of FBAs to handle monopolistic and/or malicious liquidity
providers. We provide real-world examples that demonstrate that the costs of
executing orders in existing academic and industry-standard protocols become
prohibitive as order size increases due to basic value extraction techniques,
popularized as maximal extractable value. We further demonstrate that
FairTraDEX protects against these execution costs, guaranteeing a fixed fee
model independent of order size, the first guarantee of it's kind for a DEX
protocol. We also provide detailed Solidity and pseudo-code implementations of
FairTraDEX, making FairTraDEX a novel and practical contribution.
