Money flows to everyone, just more goes to those with more money. However that isn't as bad as it sounds. If you own 10% and someone owns 1%, after the money has been given out you will still have 10% and they 1%. From a relative wealth perspective it actually just maintains everyone's position in society, neither benefiting nor disadvantaging anyone...

That's the spiel at least...

If I have 10% and you have 1%, I might be able to keep 5% locked as my stake and 5% liquid, where you need 0.9% liquid and can only lock 0.1%. What was a 10:1 ratio in capital becomes a 50:1 ratio after we each chunk some out for liquidity.

Depends on how it is set up. If you require stake to be locked up for a long time then the plutocracy doesn't mean much since the stake is inaccessible (having 10 million $ doesn't matter if the box it's in is indestructible and locked)

I don't think that works. Only the very rich can take large sums of money and lock it up like that.