Why Karate Combat Is Risking It All on Crypto

The league has been running fights since 2018, but over the past year has slowly garnered more and more attention, all culminating with its most recent fight—where beleaguered influencer Ben “BitBoy” Armstrong faced off against More Light, the founder of meme coin HarryPotterObamaSonic10Inu.

Through the use of no-loss gambling, or what they call “Up Only Gaming,” the Karate Combat founders think they’ve found a way to circumvent the massive upfront costs that usually come with starting a sports league. The founders ultimately believe that their demographic isn’t as interested in sports unless they’re betting on them.

Through integrating crypto, they’ve found a way to build a loyal and engaged fan base at a fraction of the cost seen in typical sports leagues—by applying similar mechanics to those of a DeFi yield farm.

Where many startups face a cold start problem, or the dilemma of getting your first customers and becoming profitable, DeFi farms have always circumvented this through the use of incentives. Up Only Gaming essentially takes the mechanics of a yield farm and applies them to a traditional business.

Karate Combat was initially a standard fighting league without any crypto integrations. Founders Robert Bryan and the pseudonymous Onlylarping acquired the league in 2018 with the goal of creating a sport for the next generation.

They started with a ruleset similar to UFC, but without any grappling involved. This means that any time the fighters fall to the floor and begin to wrestle, a referee steps in to bring the fighters back up to their feet. This leads to faster-paced fights with a lot more knockouts than usual.

Karate Combat’s battles are hosted at a variety of exotic locations, from old prisons to the home of the company president’s mom. Onlylarping told Decrypt that they try their hardest to make every match look like a real-life version of Mortal Kombat. Every event is streamed for free on the Karate Combat website, and the founders are committed to never charging a fee. The league makes money through sponsorships and host city fees, where local governments pay to bring events to their region.

They decided to integrate crypto after coming up with the idea for Up Only Gaming. Onlylarping had been in the cryptocurrency ecosystem since 2014, and after developing the no-loss gambling concept, felt that the only way to make it a reality was through cryptocurrency.

“When we came up with Up Only Gaming, we were convinced it would work really well for crypto and our sports fans,” he told Decrypt. “We risked the whole league on it.”

Each match has a fixed prize pool in KARATE tokens set by the Karate Combat team. Through the Karate Combat app, users can place bets on who they think they will win. If they’re right, then they gain KARATE tokens from the prize pool. If they’re wrong—well, nothing happens. Because of this, it isn’t technically gambling and can get around regulations.

The reason the founders believed this would only work in crypto is because you need a native asset to give to people when they win. In crypto, you can slowly dilute people that don’t play, so that over time the league will be controlled by the most engaged players and fighters.

Karate Combat has also been converted into a legitimate DAO, or decentralized autonomous organization—a community of decision makers, effectively. Token holders vote on the rules of the matches, and such proposals have more engagement than most DAOs today.

While Karate Combat has seen more exposure lately as the crypto markets recover and more prominent combatants enter the ring, Onlylarping told Decrypt that it’s been a slow grind, and that there weren’t any points where he felt like they “got lucky” or hit it big. He credits the upswing to years of work put behind a clear vision.

“Of course, the market helps too,” he admitted.

Edited by Andrew Hayward