Ever since we started work on the new LessWrong, improving the karma system has been top priority for us.
We started giving users a higher vote-weight when they themselves had accumulated enough karma, and have plans to implement various more complicated schemes, such as Eigenkarma. But we recently realized that more important than how karma is calculated, is how karma actually influences the user experience.
The key purpose of a karma system is to allocate the attention-bandwidth on the site towards users who make the most valuable contributions. Historically we have done this via sorting, but sorting is only a small fraction of how we can possibly allocate attention. And as soon as we realized this, the next step was obvious.
Adjust the size of your content, based on your karma
This means, as you get more karma on the site, your comments literally get larger. At the beginning, you will be a mere dust-speck among giants in the comments, but after you engage with the site for a bit, your words can tower over those of your contemporaries.
This changes everything. Vertical space on the page is now properly allocated according to our best guess about what content you will want to read. People's influence and history on the site is clearly communicated to anyone skimming a comment thread. Competing with your friends for karma now literally translates to determining who has the larger "D". The positive effects are too numerous to all list exhaustively here.
We believe this truly revolutionizes the way karma works on LessWrong, which is why we are proud to call this new system "Karma 2.0". We also believe there are many more promising improvements in this direction. We are soon planning to experiment with coloring your comments green or red based on the ratio of upvotes to downvotes your content received, and adjusting the line-height of your posts based on our estimate of how vacuous your claims are (to properly signal to the user the correct ratio of content to "hot air"). Stay tuned for the upcoming "Karma 2.1" and "Karma 2.2" which will implement these features.
However, if for some inscrutable reason, you want to disable Karma 2.0, you can do so by editing your profile (click on your username and then click "Edit Account") and checking the "Deactivate Karma 2.0" checkbox.
Signed Oliver Habryka, Ben Pace, Raymond Arnold, and Matthew 'Vaniver' Graves