Dancing Dragons is one of the two places where players can trade Mugs for Resources. Here you can trade Mugs for Souls and in The Cat’s Meow you can trade for Rings. The base reward in Dancing Dragons is 5,000 Souls which is then multiplied by a random multiplier between 1 and 5x. The base reward was 500 for the longest time and was changed with patch 164 in July 2017.
It appears that the multiplier has about a 30% chance to be 1x, and probably the same for 2x, and then around 20% for 3x, 15% for 4x and 5% for 5x. These numbers are purely based on my casual observations from playing the game. If you have an active Hero Treaty your rewards will be increase by 50%.