Karate Combat Launches Layer-2 Network to License Game Model to Other Sports

Fighting organization Karate Combat is set to launch a Hedera layer-2 network called UP in Q1 2025. This will enable the league to license its “Up Only Gaming” tech stack that powers its app to other sports, leagues, and projects—maybe even meme coins. 

Karate Combat, which counts MMA legends Bas Rutten and Georges St-Pierre as ambassadors, has grown in popularity in recent years thanks, in part, to its push into crypto and its token-hungry user base. Karate Combat’s mobile and web app allows users to wager KARATE tokens on upcoming fights. Bet correctly and you win KARATE tokens; bet incorrectly, and you lose nothing.

The crypto-powered app, alongside entertaining fights by professional athletes and crypto influencers, has fueled Karate Combat’s recent success, pseudonymous co-founder “Onlylarping” told Decrypt in an interview. And now, the organization wants to let other projects get a slice of the pie.

“Over the last year, we’ve had a decent amount of demand from other sports, leagues, teams, esports teams, poker tournaments, gambling products, fantasy sports, startups to either license or copy what we built,” Onlylarping told Decrypt. “We're already very heavily motivated to spread ‘Up Only Gaming’ outside of Karate Combat.”

There are currently 20 to 30 projects set to launch on the company’s forthcoming layer-2 network, the co-founder said, and Karate Combat still hopes to onboard several more before the L2 goes live.

For now, the pool of projects that might use the UP network is wide open, Onlylarping said, even inviting meme coins to join the party. He added, however, that there may be a future in which a big partner asks for exclusivity in a category.

Apps launched using Up Only Gaming will record transactions on the UP layer-2 network. This doesn’t mean, however, that these projects must launch a token on UP or Hedera. Instead, users will be able to deposit other tokens onto the app, and the app will create a synthetic version to use.

“We're not trying to gatekeep this thing,” he said. “We're not trying to force every sport in the world to launch a token on UP. It's just never going to happen,” Onlylarping told Decrypt. “But if people want the software for free, and they want a grant, and they want to share their users, and all this stuff, then their users need to use UP while they play.”

UP aims to launch a token next year that will have a portion of its total supply allocated to a grants program set on helping early builders on the network. 

The Karate Combat co-founder hopes that the network of games will share player bases, not unlike what we’ve seen recently in the Telegram gaming ecosystem as mini-apps incentivize users to play other games for in-game rewards. For this reason, the team hopes UP could help bring more eyeballs to the sport of Karate Combat.

Additionally, 30% of the total token supply of UP will be assigned to flow back into wallets of KARATE token holders. How this will work exactly is still yet to be determined, but the team is exploring staking as well as boosting the app rewards.

The launch of UP will also bring significant backend improvements to the Karate Combat app. Currently, the app restricts gameplay to a 48-hour window and prevents players from onboarding during Karate Combat events—due to the on-chain snapshot system that it uses. The update will see every prediction, fight, and token reward all recorded on-chain, which will make the entire experience more nimble, removing the 48-hour restriction.

What may surprise some is that this is all being built on top of Hedera, which may have made a splashy debut in 2019 but lacks the name power of an Ethereum or a Solana. While Ethereum is currently home to a bevy of layer-2 options and so-called appchains, UP will in fact be Hedera’s first L2 network.

Karate Combat’s choice to go with Herda comes as the result of a three-year business relationship with the HBAR Foundation, the co-founder explained. He said that while most other chains “didn’t really understand” Karate Combat’s vision, Hedera did.

“They really got it. Some of the people there kind of fell in love with it, and really supported us and convinced us to come to Hedera. It has worked out fantastically well,” he said. “And when we went to talk to the HBAR Foundation about what we wanted to do [with the layer-2 network], they supported us in a big way.” 

Karate Combat will release an open source library to help future projects follow its path on the Hedera network.

“It's great to be a trailblazer, but eventually you want to be part of a category on CoinGecko,” Onlylarping told Decrypt. “It'd be great if we can build a category of tokens that look similar to Karate Combat. We're intrinsically motivated to do it. And we’re intrinsically motivated to make it happen as fast as humanly possible.”