Why don't we just go with a flat bounty per head?
The simplest ideas are the ones that take more time

. I think your suggestion is good. Why go for unnecessary hussel? I tend to agree with this, let it sink in with others as well.
I am inclined to implement this.
Hope it has nothing to do with the
proposed bounty on your head by iv4n 
. I mean. It kind of puts you in a little adverse position.

No no, I am happy seeing that iv4n is willing to add some extra spice to the game. That's fun and he is willing to sponsor it, which is great for everyone involved.
As for the bounty per knockout, this is how it should be. It is a knockout tournament and that is where the extra incentive lies to go into a pot and try to take someone down. If we then turn all the knockouts into a lottery, the worst that can happen is that someone with 10 knockouts doesn't get a single penny and that person will probably never play a knockout tournament with us again. Knockout bounty is what it is: knock someone out and you get paid! I like it the best.
We can of course do a mystery knockout format at some point where every knockout is a ticket to a lottery, but I am not sure how many people would like that format. I am going to experiment with whatever you guys here are coming up with, but for now I think playing the standard versions attracts the most people and this is what we are after for now.