I think this question wholly depends on the server’s financial growth and whether or not the server/staff-team could afford to give away straight cash; I believe it would be an exploited system that could become a legal issue; in which case I would definitely recommend some sort of merchandise store that would include giveaways, such as a battleship figure or (probably for a greater price rather than gave away) a desk figurine of their character or whatever they choose? Marketing is not my strong point, yet literature, communication and common sense I believe are my strong points, I apologize for not meeting the word count on this one, but I am stumped on how to effectively answer the question without creating a mess of links and on-the-spot financial ideas.
For under $50, you could give away some server ranks as that wouldn’t need to be paid for and it will leave the players in a very good mindset meaning they will come back to the server.
For over $50, you could give away some gift cards too as people will be able to choose their prize with them rather than have a specific prize.
Personally I think that this is a very difficult thing. When you’re a starting server why do you want to be like hypixel. This isn’t an attack but it’s as simple as that you can’t afford it to give away such a big amount. I think it’s the best to give someone some in store credit or a giftcard. In my eyes this makes a lot more sense then just hosting events and spending thousands upon thousands of dollars on it. This is my view on it. Sorry that I don’t tell it in 300 words or more but this is my point and no more words needed.
It also depends on the event. Should it be something simple as a voting event , most players to have votes at the end of the month wins for example 10$. I don’t think the money should be physical but instead store credit if the player so chooses. This way , they can choose to either take the money , or simply buy a rank or some crate keys per say. However if the event is much bigger , lets say a 1v1 16 player tournament I think the max prize should be 30$. This way , second place get 10$ , and third and fourth can get %$ each. It may be a smaller prize pool , but it ensures that 4 people have a chance of winning instead of say 1 with a huge money pay out. However those kinds of events can also be held.