Good question. Let's take examples from real world like Formula 1 racing point system as much as few contests here on Steemit itself, like Hive account@originalworks. There are two important aspects to consider towards the point system (as in F1) or the prize (as on Hive account@originalworks). These are:

1. Differential rating (or earning) based on position or rank
2. A larger spread

What do these mean? The first point means that there should be some incentive for people to top and not just attempt to be in the top group. If the first 3 get the same point then they won't attempt to be one but just one out of three. The quality of output is therefore different. The second point means that while the topper should be awarded more but the general participation should also be rewarded. In doing so, more participants should be covered. Hence, the prize should be able to cover more participants.

Taking these points into consideration, this is how I will award the participants. This award system will cover around 45 participants for the award of 300 Steem.

Of course, we can play with the top prize to cover even more participants as the number of participants increase. Alternately, increasing the prize and then reworking the number of participants covered.