Riot Games first released ranked mode in VALORANT during the closed beta. Since then, there have been multiple changes made to the rank rating system following the official launch.
Until episode 2, the ranked system in VALORANT was really vague, as there was no clear indication of exactly how much you gained in RP in your ranked match. After getting clear feedback from the VALORANT community, the developers at Riot Games finally decided to move away from that arrow system to actual numbers to indicate rank progress in episode 2.
There was also a lot of instability in the overall ranking system, as sometimes it would highly demote or promote players in unpredictable ways. For example, some players would get heavily demoted following one lousy match. This new system implemented in episode 2 is supposed to make the system more stable.
However, some confusion still remained about precisely how your hidden MMR affects your rank rating. A Riot developer took a deep dive into exactly how your hidden MMR works, in conjunction with the new rank rating system, in the game to make the rank experience even better.
Hidden MMR Explained by Dev
In short, episode 2 has made some crucial changes to give players who just had one bad game a buffer before a demotion and also made some changes that would let players climb more realistically when they have a perfect match.
By giving players a hidden MMR and then comparing it to their actual MMR, this new system can more accurately predict your actual rank. The dev believes this is healthier for the rank system in the long run.