I know there are a few post about a Velodrome, but here are my thoughts how to implement it
People start with a calculated number based on ftp, so people can only race with people of the same strength. BUT this number will decrease/increase with points earnt in the races. So if you win a lot of times you will get a higher ranking and therefore must race against people with higher points. That way people can move up / down a virtual ladder and will ride with people of the same strengt.
Of course a maximum number of riders must be allowed in a race. People can go in a waiting room and there the system will create the races. Since in my opinion there are a lot of people so the races can be created quickly.