Just to add onto this also. This is why I considered giving out payments, although that also has its drawbacks. Honestly, I couldn't care what the motives behind someone reporting is as long as they're not gaming the system. Therefore, I don't mind offering rewards up for users that are using the system properly, but as soon as payment is introduced I know that it will be gamed to no ends. I'm not a big fan of handing out merits for reporting, although I wouldn't critique anyone doing it as there's far worse things they could be wasted on.
Monetizing report will create another headache for moderators as it will be hard to go through every report as i bet you will get tons of bad reports just for the case of getting paid , it must be a voluntary system without any perks to get the best results from dedicated members but having a annual display of good reports by users is not a bad idea either.
@OP i will sponsor the second place winner and since i am sponsoring i am not participating in this competition. Posting my report history though to show i could be a contender

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