I like the way they do the ladders on GT. Everyone starts on rung one. The games are setup by the server so you can't choose who you are playing (keeps strong players from chosing easy wins). The system pairs you up with someone from your rung (i.e. rung 1 at the start). When the game is complete, the winning player moves up a rung (i.e. to 2) and the losing player moves down 1 rung (or stays on rung 1, as it's the lowest you can go.) Does this make sense?