The pay outs are in Stacks (STX) tokens. Only the pilot phase was in USD/BTC which came from a developer growth/marketing budget that Blockstack PBC funded.

See this post for details: https://blog.blockstack.org/app-mining-plans-to-pay-blocksta...

Newly minted tokens as incentives have been in use since Bitcoin started 10+ years ago. We are using that concept for developer incentives.