Elo rating originated in chess (see Wikipedia), but has since been adapted for other sports, including LFM.
The system calculates an expected ranking for each driver, taking into account their own Elo in relation to the Elo of all the other drivers. If a driver is able to finish the race with a better position than expected, they win Elo; if they finish with a worse position, they lose Elo. The expected ranking already takes into account that in racing (unlike in chess) the average ranking actually achieved by a driver can be influenced positively or negatively by many variables (e.g. racing accidents, driving errors, weather, strategy, retirements). Therefore, for example, the expected ranking of the driver with the highest Elo in the field is not first place. Likewise, the expected ranking of the driver with the lowest Elo is not the last place. The expected ranking has nothing to do with the starting number.
The allocation of Elo points among the drivers participating in the race is always a redistribution. Drivers who perform better than expected by the system receive Elo points from those who perform worse than expected.
DNS / DNF:
Those who are registered for a race but do not take part in it (DNS) or finish a race before the end (DNF) will still be counted and lose a corresponding number of Elo points. It is therefore advisable to withdraw from the race in good time or, in the event of an incident, to finish the race in order to possibly make up one or two positions and thus keep the loss of points to a minimum.
K-factor:
The so-called "K-factor" indicates the weighting in the Elo calculation. This is set depending on the race length. This means that the 45-minute races are weighted the highest and the 20-minute races the lowest. For example, you receive relatively little Elo for a good race result in the GT3 Rookie Series compared to the other series.