There are two kinds of prizes often given out at rodeos. One is prize saddles - which is obvious. Saddles are expensive, and western saddles fit a decent variety of horses.
But why buckles? I've wondered this myself - modern cowboys and cowgirls often like bling on their belts, and traditional buckles are supposed to reflect history and personality. Native Americans also made spectacular belt buckles. So, why?
In fact, cowboys to start with avoided fancy belt buckles and preferred suspenders, which were less likely to be caught on the saddle horn, a steer's horn or whatever.
Some research shows two possible origins for the rodeo buckle.
The first is that a lot of the early rodeo cowboys were also involved in boxing, so the rodeo buckle may be associated with prize belts. This appears to be anecdotal, but...it's an interesting thought.
More likely, though, is that it can all be blamed on...Hollywood.
In the 1920s, the movies started to show large, blingy belt buckles on cowboys. Remember that movies were silent at this point. Belt buckles with a cowboy's ranch affiliation on it were a good visual cue to help tell characters apart (hat colors were also used, and this is the origin of "White Hat" for good guy).
Real cowboys then started wearing the Hollywood belt buckles and they became part of rodeo tradition - and some of the ones given out as prizes at the highest end rodeos are solid gold.