Imo it'd be better if the first didn't have an entrance fee so the kinks can all get worked out, and then if you really are planning to make it a recurring event you can do a small entrance fee in the following tournaments (15k to 20K maybe?) it kinda depends on how many applicants as to what would be a good wager. if lots sign up, a small amount like that could add up really fast, but with only like 6 or 7 players then a small fee wouldnt really reward much profit.
I'd also say do 1v1, especially because it'd be the easiest to organize because you can just use the regular duel server for it.