Participation rewards are a simple allocation concept but one that was virtually unknown in the blockchain space until its pioneering implementation on the Peerplays blockchain.
Like most online gaming platforms, the Peerplays blockchain collects a small fee (percentage of the money won or wagered, depending on the particular game/app), which is typically called ‘rake’ or ‘commission’. These fees are automatically sent by the blockchain into a virtual account, where they accumulate until the next payout date is reached. On the payout date, all funds are automatically distributed to the accounts of PPY token holders, proportional to the total percentage of PPY tokens belonging to each account.
Allocations are distributed to PPY token holders in the same digital currency denomination that the rake fee was paid in. If 1 BTC was bet by an end user, and a rake fee of 0.03 BTC was collected, then PPY token holders will receive their share of that particular rake fee in the original BTC. If the original bet was in ETH, then the allocations will be distributed to PPY token holders in ETH, and so on.
It is important to note that PPY tokens must be held in the Peerplays Core Wallet to receive allocations. If a user deposits PPY tokens with an exchange, for example, any allocations for those tokens will go to the exchange, not to the user who nominally ‘owns’ them.