FairTraDEX: A Decentralised Exchange Preventing Value Extraction. (arXiv:2202.06384v2 [cs.GT] UPDATED)

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 …

exchange value