RE: Building a Sustainable Prize Economy for The Fallen Mages

Yes, a transparent treasury is a great idea, and a dashboard to show some metrics as well (but not more than one number on the homepage, the rest could be some clicks away, only for users really that interested).
At least in my chess tournaments I give of course more to the top3 but at least some reward to all players, when they have participated a minimum number of rounds, to compensate for their dedication. Motivation-wise it is better to e.g. not give prices to only the top5. But it depends of course on the conditions, how much there is to distribute and how many players.
I would go for regular small tournaments, especially if the game is not that known.