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Mesh-based peer-to-peer (P2P) streaming has proven to be a robust and scalable way for delivering live video streams over the Internet. In this paper, we study how to optimize overlay in a contribution aware manner. We have designed a suite of protocols to construct and optimize the overlay. Our core idea is to promote nodes with larger contribution closer to the source node so as to keep a compact and efficient mesh-based streaming overlay. Our method is evaluated through extensive simulations. Experimental results show that our optimization method can efficiently exploit the serving capacity of peers so that the performance of the overall streaming delivery is improved. Compared with the non-optimized overlay, the p2p streaming applications using our method could cut down the average latency by 20-50% and enhanced the continuity index up to 120%.