Oh actually making a formula is simple, you just do something like add the baseline
baseline + (any formula that exponentially goes towards 0)
The problem with doing a stepped rating is you encourage behavior like "word cutting" (which keeps popping up at the moment in the entry thread). My opinion is given a fixed step, people will try to make their work worse, just to reach that step. I'd rather they just try to improve tacking "less words" as just a nudge in the right direction. Also your threshold scheme defeats the idea of wordcounts acting as unique IDs and making ties hard to happen; but that's of less importance.
Given we also want simplicity
I'm all for your hybrid threshold idea. Though how about a lower threshold at the start. Let's take my little writers quote in my signature, curtsy of Mr. Wright as a example of "small" entry:
Quote:
I would hurl words into this white darkness and wait for an echo,
and if an echo sounded, no matter how faintly, I would send other words
to tell, to march, to fight, to create a sense of hunger for life that gnaws in us all.
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(it is 44 words)
So how about the threshold be: 0, 50, 100, etc