Depends on the tournament but most should be a single character in a single tier. I'm not against a tournament with more then one character involved.

I thought up a good idea for a persistent world. Sort of like sword art online but in real life where a portal opens up in everyone's worlds to a world inhabited only by an insanely large tower (it also has underground dungeons below it) and the monsters inside it. To constantly move the plot forward we have the objective to keep going up the floors to explore more of the tower. Floors can have vastly different terrain and climate with artificial skies on each ceiling to give the illusion of each floor being it's own world. Some characters want to prohibit others from making their way up, possibly so they have all the glory of reaching the top, which nobody knows how high up it goes due to magical cloud cover by the 50th floor up so can only find out by way of going up fro the inside.