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Maybe with this, streaks can be based on who can stay at the top for the longest wins. (At least for ranked streaks)
If to my understanding you get demoted, once you leave/lose.
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Check out the jsfiddle link. You can just add names and click buttons to see what would happen to confirm your understanding.
Retirement means you're out of the game and have to rejoin. Demoted means that you're shifted down to play again the next lowest active tier (or retired if that doesn't exist).
So basically you can lose at tier 1 100% of the time and win at tier 2 100% of the time giving you a 50:50 win-loss ratio. You should still be ranked higher than anyone who loses at tier 2 100% of the time and wins at tier 3 100% of the time giving them a similar 50:50 win-loss ratio. Of course the number of active tiers should be taken into account too.
I.e. The tiers are naturally selective by skill level, but certainly won't give you a better win-loss ratio. I would imagine that implementing this system could make it easier to reflect skill in the ranking system.