Good question.   Obviously any new funding system would need to have allowances for things like this.    Eg:  How do you define a "party"?    What's the minimum number of candidates to be considered a "party"?

Our democracy has to leave room for the "Rhino parties", etc.    So any new funding formula would have to allow for this.    

Maybe registering for as a candidate would have a stipend, and when multiple candidates register, there would be some form of "bonus".     Certainly there are would be ways to account and allow for participation.

Right now, it's pretty hard to start a new party anyway, so it's not like a new formula would stop any trends.