To provide efficient incentives, the three components of an incentive system (i.e., performance measurement, rewards, and the allocation of decision rights) need to be balanced against each other. In practice, the authority to decide on these components is frequently distributed across...

I show that capital is misallocated across liquidity pools on blockchain-based decentralized exchanges. Many pools have persistent abnormal returns, both with respect to factor models and compared to options-implied liquidity premia. Pools with higher past returns continue to have significantly...