In Colosseum, you battle aiming for the higher layer.

In term 1, your layer is decided by your ranking in the qualifying. In subsequent terms, as you can see in the image, you will be promoted to a higher layer if you are on a higher rank, or demoted to a lower level if you are on a lower rank.

You can get CP(Colosseum Point) depending on which layer you're in and your rank in your layer. The more CP you can get, the more amount of GOZO you can get when Colosseum finishes.