Karl is an animated statue from the fictional amusement park, "Castle of Nations". He runs on magical energy from the Castle, who is also in the Castle of Nations. His creator, Unknown-Person, created flashes on deviantART, depicting Karl in a OCT (Original Character Tournament) called "Law of Talos". His raven, Arma, who is made out of the same material Karl is, and has the ability to shapeshift into various weapons of Karl's choice, and the ability to mend Karl when a part of his body is broken.
Karl entered the tournament because the winner gets a free wish, so, he planned to wish for an infinite energy source, so that he could be able to never run out of energy. As fights pass, he keeps losing energy.
That "same mistake" mentioned in the second round and in the final round, is the mistake of wasting the energy.
During the rounds, he is also shown to be a liar, and a psychopathic murderer.
In the final round, he made the same mistake again and was struck in the side of the head by Annie, therefore, concluding his tale.
In the end, he never won or got the energy source as he planned to.
In Round 3, he gives Rellik a question, "How long do you think she'll be your friend?
As long as it's convenient. That's how humans are, and you're wasting your time and effort trying to help her when you could be free." That statement gives us the idea that he think every human is like this based on what he thinks the red-headed woman, or Rachel did.
As the time goes on, you may notice that images of a red-headed woman flash by. The woman in question is even mentioned in Round 3. Many have speculated that that woman is Karl's dead girlfriend. In Round 5, Karl vs Professor Part 1 of 2, you can see images of a man with a gun, the red-headed woman in shock, and Karl with an eyepatch where his scar is looking completely saddened and shocked as well. But, no one knows about his past for sure, so it is up to speculation of what happened in his past. In the end, we might never know for sure what happened in his past.
Karl is depicted as a man whom seemingly good with polite manners when met people and opponents alike over the course of the rounds, even before start the battle. However, this proved to be a ruse due to him hiding his true nature as a liar with traits that fit for typical yangires that he immediately revealed once his foes distracted with the said ruse: psychopathic, murderous