Champ is elected by how good he is at hacking to make it look like he posted first. The first 6 different suggested Pokemon form the champ's team. Champ hacks the suggested Pokemon into Showdown and goes into OU to fight Smogon hackers. We all follow him and report any hackers we see (i.e.: everybody).

When old champ gets tired of getting hacked, he calls for new team or new champ and the cycle continues.

If any of this confuses you, lurk moar and you'll catch on pretty quick. Or not.

Hacking Resources:

Current champion hacker: mango !AyylMaodY

Popular hacked mons: http://pastebin.com/0bYpM0at
Artist's depictions of hackers: http://booru.showderp.com/
Secret hacker club: http://plug.dj/showderp-1/