Definition ∞ Skill-based rewards are incentives distributed to participants based on their demonstrated ability, performance, or expertise within a given system or activity. Unlike random or participation-based rewards, these are directly tied to measurable achievements or proficiency. This mechanism motivates users to improve their capabilities. It promotes meritocratic outcomes.
Context ∞ In blockchain gaming and play-to-earn models, skill-based rewards are increasingly important for attracting and retaining competitive players. News often highlights games that offer cryptocurrency or NFT prizes directly correlated with player performance. This reward structure supports sustainable in-game economies by valuing player aptitude.
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