[PASSED] KICK-8: $KARATE Staking Working Group

General
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BACKGROUND:

Karate Combat’s Up Only Gaming and governance proposals are currently open to every $KARATE holder on a specific snapshot block. The snapshot prevents the “same token” from voting more than once, without requiring a user to stake, send or lock their $KARATE to participate. The structure has had advantages including minimized smart contract risk, friction, and educational barriers.

However, I believe unlocked voting also poses the single largest marketing hurdle for the adoption of Up Only Gaming. As the league grows it is booking bigger fights, further in advance. Huge fighters are calling each other out and publicly asking to fight in Karate Combat, unprompted. The rapid ascencion of the league surprises even me.

If and when these massive fights are arranged, they will often be booked months in advance. With unlocked voting, there is no way to effectively promote the Karate Combat app until the snapshot is a week away. For instance, the biggest market on the upcoming Nic Carter vs David Hoffman fight is on Polymarket. These tentpole fights deserve immediate calls to action available within the league’s web3 products. That is simply not possible with unlocked voting.

Further, the current setup makes it impossible to onboard a new player after the snapshot block and during the voting period, let alone during an actual event. This kneecaps our most effective onboarding window. In theory, if we require $KARATE token holders to lock $KARATE through a fight to participate in Up Only Gaming, votes can be cast months in advance and all the way up to and during an event.

Lastly, I believe that implementing a staking and locking mechanism can also provide an avenue for advantage to smaller $KARATE holders that are willing to make outsized time commitments to the league. Up Only Gaming rewards can be disproportionately allocated to $KARATE holders that lock their tokens for the longest period of time.

PROPOSAL:

I propose forming a working group of KC developers and outside governance experts from within the crypto ecosystem to first propose and then hopefully develop a $KARATE staking mechanism this year.

WE NEED YOUR VOTE:

Should Karate Combat form a working group to explore, propose and potentially develop a $KARATE staking mechanism and locked voting bonuses?

  • YES
  • No
0 voters
22 Likes
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Absolutely necessary to stop post snapshot dumping, you already suggested increased rewards for those who lock staking for a longer period, I would also suggest increased staking rewards based on annual leaderboard placement. This would financially encourage people to ensure they play every event.

21 Likes
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It is imperative to introduce staking to at least check whether this will stimulate an increase in the price of the token, since in 3 months we have tried everything, referral codes, and fights in Dubai, all that remains is staking or listing on other exchanges. . to protect the token from falling to the bottom, a long fall will only cause negativity and disappointment, otherwise a second unsuccessful project will appear, like the FAME token from the largest freak faight federation in Europe, this is a scam, since their token was simply deceived by everyone, we don’t need problems with SEC, we need growth and inspiration from $karate holders. :crossed_fingers::crossed_fingers:

11 Likes
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I can’t help but find it peculiar that we’re seeing this just a couple weeks before the big unlock for private investors :thinking:… Veterans of crypto have seen this tactic used before (e.g. Apecoin). For now, I’ll assume that the timing is just a coincidence.

I actually agree with the concerns that @onlylarping presents here.

  • KC should be able to be able to hold votes at any time to stay nimble but they we need to be protected from mercenary voters.
  • Restricting latecomers from playing just before and during the event is definitely a UX problem and a time lock could fix it.

The one idea proposed here that I do not agree with is what I guess I’ll call the “time-lock benefit mechanism”. Please, please, please do not force users to lock their tokens for an exorbitant amount of time in order to remain competitive in receiving up only gaming rewards.

Curve Finance is the predominant example of this. With their “ve” (vote escrow) model, they will allow you to lock your tokens up for up to 4 years. If you don’t stay locked for 4 years, then you will receive less of the protocol revenue than those that are willing to lock up for 4 years. Four years is an insane amount of time and so I think this model turns a lot of investors away. I think this is evident in the CRV token’s performance.

Instead of taking an approach of giving users a greater reward UP FRONT the longer they lock up, I prefer the approach of allocating a greater and greater share of rewards the longer that someone stays staked. Think of it as a counter that goes up over time. And if you unstake, the counter resets.

The GMX perpetual DEX “esGMX” staking model is a good example to follow imo. Karate Combate is a different type of product though, so the model probably doesn’t translate perfectly. The Vertex perpetual exchange has a similar but simplified model for staking the VRTX token, so I would suggest taking a look at theirs. (Disclaimer: I hold VRTX.]

When it comes to keeping mercenary voters out of early votes, you can simply require a 2 week lock or something in order to vote. Two weeks after the vote concludes of course.

9 Likes
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I didn’t get if you mean that people should place the bet weeks before when they stake. That would be wrong because when it comes to fights everything can change from a day to another and I suggest to leave the voting window like it is.
Beside this, staking can be one expedient to prevent KARATE dumping after the fights, although, I’ve to be honest, the real issue with KARATE dumping is due to its very bad tokenomics. I suggest to implement any sort of staking in conjunction with the increased vesting because that will lead to far more dumping or at least will dumpen the pumping.

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4 Likes
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BlockquoteThe GMX perpetual DEX “esGMX” staking model is a good example to follow imo. Karate Combate is a different type of product though, so the model probably doesn’t translate perfectly. The Vertex perpetual exchange has a similar but simplified model for staking the VRTX token, so I would suggest taking a look at theirs. (Disclaimer: I hold VRTX.]

that’s super interesting. i’m well aware of crv but haven’t studied GMX too much.

i like the idea of encouraging continued staking as opposed to locking people in upfront. hopefully the math is manageable onchain!

5 Likes
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for sure fights can and do change but with voting you can change your votes up until voting ends.

another benefit here is that voting MIGHT not need to end until right before each fight.

7 Likes
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Agree with staking but no forced lock up

3 Likes
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instead of lockup, maybe you can go with a mechanism like DOVU, No lockup, no smart contract, tokens stay in your wallet and you get an increasing staking multiplier the longer you hold them and not a single token leaves the wallet. Multipliers can also work as a gamification part like holding an NFT or an additional lifetime bonus if you never moved a single token. Attached a screenshot from DOVU staking app.

Therefore I nominate Matt Smithies X: @flyinggazelle for the group

13 Likes
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Very good. Go staking $Karate

4 Likes
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Overall I think this idea is advantageous, but with locked staking there are two things I can see people having an issue with.

  1. Having access to their tokens in a timely manner. This can be easily worked around with an easy unlock mechanism (which of course would remove their tokens from being eligible to vote) that allows partial or complete unlocks of their tokens, providing flexibility and letting users retain control over their investments.

  2. Ensuring they have access to their KARATE token rewards post-fight so that they get to choose whether or not to add them to the lock up (as some platforms utilize an auto compound method that stakes rewards as they are earned). Again the key here being flexibility/choice.

Other than that, I believe this is the best way forward to strike a balance of rewards for the token holders but also strong incentives to hold the token to increase ecosystem stability and also attract new users/participants.

3 Likes
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OKay OKay Ill Buy more $karate.

Seriously though. after reading this proposal and the comments below. This seems like a solid move if the concerns that people have are addressed.

Karate Combat is awesome and looks like its gonna get even better.

4 Likes
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this would be a huge bonus tbh to be able to bet on fights right up until the first bell. would love that

5 Likes
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The only reservation I have is pulling liquidity from DEXs. I don’t provide liquidity at the moment so I’m not over l concerned, but it should be considered

3 Likes
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Agreed I want to bet on the fight right before the event or fight starts

3 Likes
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Would be very different to implement the esGMX GMX model exactly, that method for attracting sticky liquidity in the beginning which paid out in native ETH generated from trading in the GMX pools. $Karate definitely needs some staking mechanism though otherwise we are just printing too much here with low float high FDV at the moment. The gist of esGMX we could certainly emulate which is to increase rewards via time based holding/staking. I think instead of solely thinking about bettors and staking in advance for big/mega fights we need to think of attracting longer term holders as well. Align or create vested interests with partners or participants in uponly gaming on a longer time frame. Advertisers, other protocols, MMA gyms, maybe even form regional or gym based clans that require holding and staking a certain % of $KARATE. For all of web3’s pros and cons by far the biggest opportunity unlocked is the ability to align interests and create win-win situations versus traditional models.

3 Likes
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Agree with all points mentioned, staking would be a useful addition to up only gaming.

However, the tokenomics leave somethibg to be desired. A max supply would help $karate hold value and retain investors imo

3 Likes
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I would to propose a mechanism that aims to reward holders in a progressive manner leading up to the fight. Holders could receive increasing rewards daily for a period of 30 days before each fight, Ending in the final 48 hours with a sliding scale of rewards. This system encourages holders to stay engaged and rewards them for their commitment. Furthermore, we will offer stakers the flexibility to adjust their fight picks within the 48-hour window without forfeiting their staking rewards. There should will be no mandatory lockup period; instead, holders can simply stake their tokens in the Official wallet and select their preferred fighter to start receiving daily rewards that escalate gradually. While the option to exit the staking position at any time could be available, doing so will result in the loss of accumulated rewards. Re-entry into the staking position will reset the sliding scale, providing an incentive for holders to maintain their commitment.

Rewards should start at somthing like 2%apy. could vary
After 30days it increase amount to 6%apy
Each day increase by a proportionate amount.
closed 48 hours before the event for voting.
Reset 32 days before next event

things to consider
This would give a haircut to the Up only gaming rewards.

Karate combat League would need to commit to putting together a Full card before the 32 day windows to make this smooth.

1 Like
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This is a nice idea, maybe both options could co-exist somehow?

Some people are happy to lock for longer periods, others may want to stay liquid and accumulate points on the counter system.

I think a 21 day unlock period is reasonable, it prevents rage quitting and dumping the day after an event, which is just a bad look even everyone is in good spirits after attending a terrific event, kind of like a bummer feeling.

Also, with 21 day unlock, that time period almost carries you thru to the next event, and so people might change behavior and not even dump b/c they love KC and want to play the next event which is just 7-14 days into the future — there is an event almost every month now for 2024!

Re the lock option, it’s also possible to let users arbitrarily define how long they would like to lock, 21 days, 240 days, 500 days, etc. and if reward or gov vote boost is calibrated on a mathematical curve (which could also be used for the counter method), then you basically get the boost based on where your time period (either locked or counted) falls on the curve.

I would definitely prefer not to see a simplistic set of four locking options, ie, 6 months, 12 months, 24 months, 48 months. Agree with the OP, that is not a fun experience and a limited use of the tech that undersells the potential.

I would love to see us brainstorm on how to connect fan loyalty benefits to the counter or locking system, that would be sick actually! It’s never been possible to track fan loyalty and this finally gives us a system of doing it! :white_heart::white_heart::white_heart:

2 Likes
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amazing system, I didn’t know it!

1 Like