Karate Combat: Up Only Gaming

I’ve been interested in Karate Combat from the moment I heard about it.

It combines a number of key themes I look for at Future Earn:

• Community owned token: with potential to earn income.

• New business model: taking an existing business model (in this case UFC) and upgrading it with web3.

• Future of sports: A possible window into how we will support sports in future.

• Future of Gambling: And a possible window into sports gambling (which is a massive industry / massive problem, depending on your point of view).

If you aren’t a sports or fighting fan, put that aside for a moment, and just think about this in terms of the concept it creates. You can bet on a sports event with tokens and only get paid if you win, don’t pay if you lose.

Karate Combat: What is it?

Hold on. I bet on sports, but don’t pay if I lose? Yes that’s right, read on.

Karate Combat is like UFC (Ultimate Fighting Championship), except there is a digital currency or token attached to the league and anyone can buy it, trade it and use it to bet on fights. With the one major addition that you only win, you don’t lose.

Basically what the team did was to combine karate + crypto to launch a new global fight league, but with a token which is called $KARATE. With UFC being mixed martial arts, but too violent for many, karate - which is an olympic sport - offers a long tradition, iconic fighting style and respectful approach to their art (although this is changing as discussed below) making it a strong alternative to mixed-martial arts.

Also, Karate Combat is full contact, olympic karate is not, so there is a global stable of fighters who until now have trained to compete without having to truly go blow to blow.

It all started back in February 2018 when they held the first event in a private warehouse in Budapest, Hungary. You can still watch it here. This was followed in in April that year with the first official round in Miami (watch here). You can see the custom karate fight pit with diagonal sides, and the stylised setup with fluro lights, fast cars and young women giving the whole thing a night club kind of vibe.

They have just finished round 45 in Dubai on 20 April 2024, so that’s 45 events in 5 years (with 2 years of COVID-19 to consider). Like UFC, each round is called KC44, KC45 and so on.

$KARATE (DIGITAL TOKEN)

In September 2022 Karate Combat announced it was transitioning to a community token model.

This meant that:

• A community token called $KARATE was launched with real world value.

• Governance of the league is managed by the community meaning that anyone with $KARATE can make proposals and vote on those proposals (this could include a rule change like allowing knee strikes or banning head butts etc).

• Anyone who downloads the Mobile App is automatically awarded some tokens allowing them to get started and vote on fights.

Part of this move was due to the sponsorship of the league by leading enterprise blockchain Hedera, which had already sponsored Season 4.

The token element makes this relevant for readers of Future Earn. It represents a novel, emerging trend of sports clubs creating a tradeable fan token. Fan tokens are pretty well established through socios.com, but this is the only Up Only Gaming concept I have come across.

One question obviously is where does the money come from, based on the old adage ‘if it’s too good to be true it probably is’. So is this just a promotional offer that will cease once they hit a few mlilion users? Time will tell, but in the meantime, it meets our criteria of earning income while doing a fairly normal activity: watching sport.

Using the Mobile App

Downloading the mobile app is easy and they set you up with a wallet from the get go. As mentioned, their platform is based on the Hedera network which I’ve followed for a few years, so I was comfortable signing up and I was also familiar with the Hbar cryptocurrency (the token native to Hedera).

The app itself is very simple to use with 5 menu icons displayed along the bottom of the screen:

• Play: the app homepage which lists every KC event (see below screenshot).

• League: this is where they post updates and proposals. For example, I recently voted on a proposal to modify the clinch fighting rule.

• Rankings: this is the overall global rankings which you can toggle between last event and season.

• Wallet: this is where you can view the number of $KARATE you hold, see transactions and send / receive / buy more.

• Settings: where you can see your profile (including your own betting performance), find referral codes and legal terms.

The process of betting (they call it voting) on each fight is very straight forward.

When voting opens you lick on the event image, which then takes you through the fight card page, with the fighters listed side by side, and the ability to click through to each fighter’s stats. Voting opens 48 hours before each event, and it takes no more than a minute to vote for your preferred fighters (although it would take much longer if you wanted to research their backgrounds, relative strengths etc).

Results are then displayed after the event (see image below) including how much you placed and if you won, how much you won.

You can also see a summary of your activities and voting results on your profile page (via settings). You can see from below that it tells me how many events I’ve participated in, how many win picks, my ranking and my total winnings.

I have already been through two rounds and have a wining record of just over 50% (I am no expert). The payouts are updated almost immediately and reflected in your wallet.

The leaderboard is always interesting as you can see how much the top earners are making. The top earner below won 4,634,129 $KARATE which is approximately USD$6,900 just for the last event. That is a great payout, but would have required (a) a massive wallet size and (b) picking the majority of fights.

It does therefore favour people who can invest more money, but for the rest of us it might still be better than money in a savings account.

My Earnings

So far I’ve participated in two rounds of betting: KC45 in Dubai and Kickback 2 in Cancun, Mexico. My results from KF45 are below (9 wins and 6 losses, 218 $KARATE received).

I had ~5,000 KARATE tokens in my wallet and the system automatically allocated 343 per fight which is an even split of my whole account. You can increase or decrease the amount of each fight, but I left it as I am still learning. You can see your results are displayed fight by fight in the app screenshot below so it’s all very transparent.

The token value has ranged from a high of 0.006 down to 0.0014 so my 5,374 is worth about USD$8 and the my 218 $KARATE recieved is about USD .30c.

Importantly, these numbers change materially with the value of the token. If it was still at its high of 0.006 then my $8 is more like $32, and my winning is $1.3. So like the other platforms I’ve covered, this is a long term play where you need to think about:

• Large bag: building a large account of $KARATE over time with risk free payouts.

• Price appreciation: as the league increases is profile and user numbers, what does your wallet look like if it his 0.1 or $1, or more.

Also, that’s about a 4% yield on my money per event. That’s not per year, that’s per event. They held 5 events in 2023, so that would be 20% compounding annual yield if they have the same number of events this year and my earnings are consistent.

Reviews

While I find the concept interesting (particularly in the context of the sports betting market and how it might look in future with digital tokens), there are a lot of karate / fighting fans that have expressed mixed views about Karate Combat. A non-exhaustive summary includes:

The good:

• Good venues with unique background / set designs

• Like the focus on Karate, more about clean strikes than wrestling

• One of cryptos leading ‘retail’ platforms, mean a way to bring non-crypto people to this world

And the bad:

• Too much promotion of the crypto side (I disagree with this because they are innovating a new business model rather than speculating on crypto)

• The marketing style is to garish and over the top

• Inconsistent application of the rules during fights

• Some fighters trying to drum up excitement by showing disrespect to other fighters

• New president (see below)

My personal view is that this kind of hyper-stylised sport is the direction we are going to take - bigger, brighter, more money - and UFC has been so successful, there has to be challengers.

Also, the latest event I watched (KC45) in Dubai, was a spectacle. It had a decent crowd who were arms length from the figthers, with video game style backgrounds and a main fight which was very entertaining - two seemingly equal fighters (sure, a bit past their prime), separated by a well placed hook (rather than bludgeoned to death on the matt).

New President

The mixed feedback on the new president made be look a bit deeper into Asim Zaidi. It’s clearly a tussle between purists - those who like the respectful, traditional approach of Karate-only combat - versus the more high profile combat world of MMA (which Asim comes from).

He is publicly committing to taking the franchise to a new level. In the first round under his control, Karate Combat 43 in Las Vegas, two ex-UFC champions fought indicating the direction the league is taking. He also also called out the legitimacy of karate in the combat sports industry, saying that due to McDojos - clubs that train and award belts to people without teaching them to actually fight - the sport is not taken seriously.

His argument is that the sport needs to evolve and become multi-disciplinary in the same way jiu-jitsu has. And watching some of the fights, it’s hard not to agree… often they are far too tame compared to UFC, and to really gain traction the league will need to appeal beyond the Karate purists. However, I am a fan of the clean strike style rather than the elbows in the face when your opponent is on the matt we often see in the UFC.

I suspect as it moves forward it will become ‘all styles welcome’ with some core rules that maintain its connection to karate. For example, at the latest KC45, they allowed knees which meant the Muay Thai fighters could utilise that aspect of their style and it did add a more lethal element.

The other things is that while there is a lot of hype around it, the growth of unique users hasn’t been as hockey stick as they may have wanted. You can see the number of unique players is ~65,000 but that is only a modest increase of ~3,000 over the last month. From KC39 to KC45 is about 12 months so onboarding 60,000+ users in that time isn’t mindblowing, which probably underlines the need for new leadership.

Summary

I’d encourage anyone reading this to download the Karate Combat app and participate in the next round of fights. At its simplest, you are earning a digital token that you can sell or even just hold and forget about (although I’d encourage you to patiently farm tokens each fight round).

The bigger picture, however, is that we are experimenting with a fan governed sports league and Up Only Gaming, leveraging new technologies to enhance the supporter experience. Karate Combat may or may not prove these to be sustainable models, but for anyone interested in how we will earn in future, sports tokens is an area to watch closely.