How should you report the Crypto payout and burns from staking or participating to earn rewards? Should payout be reported as ordinary income and burn as capital loss?

The Crypto is used to pay reward as part of a data science competition. You will have to stake crypto to participate. When performing well, you will be rewarded with new crypto; if not performing well, you staked crypto will be burned (lose permanently). In this case, should you always report payout as ordinary income based om FMV of the crypto and then report burns as capital loss? How would you report payout and burns in Turbo tax? Should you treat the burn as a sales event for the crypto with proceed as $0 and cost basis from when you purchased them (or FMV for the payout, if earned payout got burned later)?