Generally speaking (not that I care) players toward top have starting advantage due to nature of only being able to challenge two people ahead. So it would require more losses to actually lose a significant amount in rank. Almost like rank security if you will.
One option would be to put the lower level characters toward the top, and higher level characters toward the bottom. In theory the higher level characters have the working advantage which *should* level out the playing field - this is how it’s done in some motor sports racing
Personally I don’t give a crap! but hell, if it is a legit ranking system I’d say do it that way
Gg