[quote=@Rilla]
So, in your original example, how many points would the 4000 player get, if they win?

In the 10% example, they'd get less as well. The 4000 player would only get 100 from the 1000 player, whereas if 1000 won, they'd get 400
[/quote]

Oh no, it only benefits the person who is a lower level, the higher level just gets the base 100 points.

It's a system to keep everyone relatively close together. If you get too high (from winning a tournament or something.) other people have the chance to catch up by beating you.