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Ladder, like Ranked allows you to play opponents in an LRB environment in order to accumulate league-specific points for fun and profit. Ok, just for prestige, really but it's a commendable goal nonetheless.
Ladder points are calculated by this formula. The basic concept is that you acquire points by winning and the number of points earned is based upon what your opponent has acquired himself - beating a team with a lot of ladder points earns you more and, accordingly, moves you higher up on the ladder. Of course, losing means that you lose points to your opponent and move down.
Further differentiating Ladder from Open is the Challenge System. In addition to earning Ladder points for wins, you can earn Challenge Points for accepting or issuing challenges. You lose Challenge Points for refusing, transferring or failing to respond to challenges. Challenge points were implemented to prevent abuse of the challenge system and for additional bragging rights and prestige.
Any team with a non-negative (ie: 0 or greater) number of challenge points can issue a challenge to a team with more ladder points than itself. You may not challenge the same team twice in a row, nor can you issue more than one challenge in a rolling seven day period. If you get "0 results found" when searching for a team to challenge this means that either they don't have more ladder points than you, or they have already been challenged by someone else and cannot be challenged at this point. If someone challenges you, the challenging team will appear on your overview page, under the team that has been challenged, and you will have the option to accept or decline the challenge.
Once a challenge has been accepted, you have seven days to play the match. If it is played, both teams gain a challenge point and the winner gains an additional one. If the match is not played, both teams lose 2 challenge points.
Ladder team point scores are displayed as X/Y, where X is the number of ladder points a team has, whereas Y is the number of challenge points. Clicking on the first number will take you to the Ladder division table, whereas clicking on the second number will take you to the challenge section, where you can issue your challenges.
Due to this being a competitive league, do not use this division to play amongst a close group of friends. The accepted benchmark for this division is 1 in 10 games played vs the same coach/team. If you want to play games among a close group of friends, create teams in the U division.