Karate Combat Launch Layer 2 Blockchain on Hedera, UP

Thanks to the 3,845 readers exploring where Sports meets Web3. If you're reading this and still haven't signed up, click the subscribe button below!

🔌 Quick Plug: Check out our FREE 38-page report on Karate Combat here! 🥋 

Karate Combat 🥋 

Karate Combat is one of the world’s fastest-growing combat leagues on the planet, and much of their impressive growth over the past year is attributed to the crypto rails they have built on. Their fights take place in a patented fighting pit, and events are produced to look like unique levels in a video game using Epic Games’ Unreal Engine. Having been at one of these in the flesh — I can confirm the experience is incredible.

The league is owned and governed by its native crypto token, $KARATE, deployed (unorthodoxly) on both Hedera and Ethereum Blockchains, albeit a significant percentage of the supply is concentrated in the former network.

This token, $KARATE, can also be wagered by fans to predict fight outcomes, for a chance to win a share of a fixed token prize pool on each event. There is no downside to voting incorrectly, as the wagers are ‘no loss’, hence the name; ‘Up Only Gaming’. 90% of the prize pools go to winning players with the balance going to the athletes.

We recently conducted a research report on Karate Combat (which you can read here) and the results of Up Only Gaming in the last year are remarkable.

The novel wagering mechanic have seen explosive growth in over the last year or so, since May 2023 when the $KARATE token was launched. Event KC 47 saw the highest participation among unique players, with almost 120,000 unique players participating in the event. The most dramatic stage of growth occurred between events KC 44 and KC 47, where there was an influx of almost 90,000 unique players onboarded to the league in under six months.

Token wagering in total has also seen strong growth in the same timeframe.

Since hitting the $2 billion mark in their Up Only Poker Night, participation in token terms almost tripled to KC 48 which saw ~5.7 billion $KARATE played. The most impressive growth has been seen between KC 47 and KC 48, with a 37% increase in $KARATE wagered.

Growth is one thing, but the retention and the percentage of total tokens staked are also telling metrics.

KC 48 saw ~5.7 billion of 21.1 billion tokens wagered in Up Only Gaming meaning over 27% of the circulating supply was wagered during the event. KC 48 also saw 94,636 Unique Players from 318,868 token holders participate in Up Only Gaming meaning over 29% of token holders participated. That engagement, as a percentage of total possible users is impressive, proving that the Karate Combat flywheel has created superfans using these novel mechanics.

Mobile Native Execution 📱 

One of the primary reasons Karate Combat have seen strong, sustained growth and retention is their flawless mobile app.

Karate Combat fans can download the app on iOS or Android and sign up easily - with a built-in wallet created for you upon sign-up.

The wagering of $KARATE is also simple - no different to placing a wager or setting up a fantasy team on any Web2 site. It includes private key management & wallet recovery via keychain solutions, and 99% of Karate Combat’s fans default to the mobile application.

UP Launch 👆️ 

Building on the success of the last year, Karate Combat are announcing UP - a Layer 2 Solution built on the Hedera network, that will also act as a crypto-native licensing platform. It is due to launch in Q1 2025, with an $UP token, of which 30% of the supply is allocated to $Karate holders.

Partners will be able to clone and customise Karate Combat’s software stack at no cost, essentially lifting and shifting the Up Only Gaming model to their respective sport, team or league. An added incentive for early adopters of the technology is the possibility of grants from the UP treasury, as well as access to the existing 100,000+ Karate Combat users.

UP will also be flexible from an infrastructure perspective — meaning anyone already beholden to a specific blockchain provider can wrap their existing tokens and create native, synthetic versions that live on the UP Layer 2 network. Karate Combat say that early wallet integrations are expected to include Ethereum, Base, and Solana networks.

Concurrent with the launch of UP, Karate Combat will release some major upgrades to its apps. Up Only Gaming currently operates through a snapshot module, which limits effective user acquisition to brief time windows. Presently, Up Only voting is stopped 48 hours before each event.

Conversely, the shift to voting on UP will allow Karate Combat and others to acquire users from the moment an event is announced up until the event ends.

Analysis & Concluding Thoughts 🧠

Karate Combat have been a trailblazer with their Up Only Gaming model and flawless mobile application, and now they are going a step further to open source the software stack that has created such virality and growth for them.