I believe that the following things are problems/failings of the current system:

1. People are being given resources (keys & BE) which they may or may not care about, because the rewards you can turn them in for are only interesting to some of the playerbase. So a number of players won't care whether or not they get rewards and may act out (or not) anyways regardless of the system.
2. As players gain more and more of the rewards, their interest falls off over time. (this is connected to #1) Eventually the rewards run out of utility! People get all the characters, or they get all of the skins they want and then stop caring as much about getting more. To keep them engaged in being honorable they may need other reasons to want to gain that honor, such as other rewards to exchange them for.

• As an aside, I know that slowing down progression is a tempting idea, because then players are kept wanting characters and skins for longer and are more likely to remain motivated to stay honorable, but this is kind of shitty from the player's perspective. Being held back from characters they want (if it is done as a policy or as a way of guarding the reward resource that is content) would be super upsetting for players.

3. Players who break the rules or fall through the cracks have such a difficult time earning rewards back that some just give up and choose to be even more toxic out of spite against Riot.
4. It costs Riot potential revenue to simply give out discounts or free copies of skins and champions to players, this should be left in (because going back on that would be immoral now) but by giving players other options to spend their rewards on, you could 'protect' more of your content from those discount purchases (without having to hinder player progress), ensuring that more players may still spend RP getting that content.

So here's what I'm suggesting, in 2 steps:

1. Make honor into something that must constantly be earned and spent, rather than a status that makes you eligible for receiving periodic rewards. This makes the process of earning honor way more interactive, even toxic people will strive to be honorable all the time because they can benefit from it tangibly rather than having to work at it in good faith and just hope that they're succeeding (and I know that transparency could help with this too, but hear me out for the rest of the idea).

2. Give people more choices to spend their honor points on so that they can always get something they care about. Something to spend their honor on that they will genuinely want to use. That way they are constantly striving to gain honor, so that they have it to spend on things that they care about. It doesn't have to be things which cost Riot money either, it's quite flexible and a lot of different things could be included or excluded as-needed over time.

Here are several ideas/suggestions, feel free to adapt them or come up with your own:

1. Consumable queue dodges, with no consequences for them using them. This will empower players to avoid games with fellow players who are toxic in champion select.
2. Membership access or tickets for lotteries to participate in exclusive discussions with Rioters about issues they care about (would be either one-time entries or perhaps a monthly membership that could be paid for with honor points or keys, could include things like a discord server).
3. expanding upon the above idea, maybe opportunities to work with teams at Riot on something, like designing or reworking a champion with the design teams, or developing lore or general worldbuilding in Runeterra with the lore team, or working on a concept or piece of art or fan content with direct feedback and help from Riot's teams.
4. Definitely keep access to keys and chests as an option, because the players who already love these things would be heartbroken if you took them away as rewards and you've already put lots of work into that version of things!
5. Maybe some form of "priority" report, so that when you report another player you get a human response to ensure that you know your report is taken seriously. People could spend their honor on this sort of thing when they report a player that they desperately want to make sure get's reviewed.

And here's why I think that this would work:

1. Players will have a wider variety of options to spend their honor points on, thus ensuring that more players will feel motivated to earn honor
2. Honor becomes much quicker to gain and spend, making your day-to-day choices more impactful on how much honor you gain and whether or not you gain access to benefits from that honor. You'll basically be increasing the demand for honor.
3. Ensuring that players who have honor are the only ones who get to use these benefits helps to ensure that only the responsible players who genuinely deserve things like penalty-free queue dodges get to use them.
4. Giving rewards like penalty-free queue dodges or feedback on their player reports empowers players who might otherwise feel frustrated and be pushed to join in being toxic. Making people feel empowered would help keep them from reaching that breaking point.
5. Giving access to special streams, discords, and lotteries to participate in discussions with Rioters will give players (who care the most about the state of the game and about Riot's choices) tangible attention from Riot and ensure that they feel heard about the issues they care about. this too, can help to reduce frustration and keep people from reaching the breaking point.
6. Also, this sort of system where rewards can be earned and spent consistently will both drive progress for the players who care, and take the feet out from under players who only care about bashing Riot. If players are upset that Riot doesn't listen (if you've created this sort of reward system) then others can simply point out that if those players got their act together and behaved decently then they would have a chance to be heard, so until they fix themselves they have less right to complain.

There's probably more that could be said about this, but I want to leave room for discussion rather than form a whole conclusion and wrap up my ideas. Share your thoughts below! I'm interested to hear what sorts of reward ideas others come up with as well as hear if people think any particular ideas I've provided here are wonderful or terrible and if so, then why. So jump in, let's see what we can come up with to help improve league!