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Here’s the official answer, posted in the main Challenge in C Minor thread:
There was a growing trend during the holiday event of players deliberately joining a challenge leaderboard as late as possible in an attempt to end up in first place with minimal effort. This has a number of undesirable consequences – it leads to higher strain on our servers as many new leaderboards are created at once, it exacerbates the existing issues of players relying on out-of-date leaderboard information in the last few minutes of the challenge, and it trivialises the effort put in by players who join earlier in the challenge.
As such, we have added some scaling to the rewards dependent on how much time is left in the challenge when a player joins, and we will continue to refine this for future events.