Well, we want boxing type "rounds", so we can have more betting action. You also want narrative to be generated by these rolls.
Betting lines:
TKO
Who wins first round
Who wins second round
Win in 2
Who wins
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Here is an attempt at generating narrative:
Baseline rules:
Each monster starts out with a specific die size -- 1d4, 1d6, 1d8, 1d10, 1d12 or 1d20.
To run a round, each combatant rolls their die. The loser is the one that rolled lower.
To find out how badly they lost the round, the loser keeps on rolling their die until they beat the winner. That is how many "hits" they took.
Now, roll the winner's die once for every hit, adding it up. Every 10 points reduces the loser's die by 1 step. If they are dropped below 1d4, it is TKO. If the winner rolls max on their die, roll it again.
Do the same for the loser, but only roll 1 die, possibly causing damage to the winner.
Damage accumulates between rounds
Fights last 3 rounds. Whomever gets a TKO or wins 2 of the rounds wins the fight.
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Bear (1d12) vs Wolf (1d8).
Round 1:
Roll(1d12)+0:
3,+0
Total:3
Roll(1d8)+0:
8,+0
Total:8
Wolf wins round 1.
Roll(1d12)+0:
11,+0
Total:11
Bear takes 2 hits.
Roll(2d8)+0:
7,5,+0
Total:12
Bear takes 1 damage. Die is now 1d10
Roll(1d12)+0:
5,+0
Total:5
Wolf take 5 damage.
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Round 2:
Roll(1d10)+0:
7,+0
Total:7
Roll(1d8)+0:
5,+0
Total:5
Bear wins round 2.
Roll(1d8)+0:
3,+0
Total:3
Wolf takes 2 hits.
Roll(2d10)+0:
3,2,+0
Total:5
5 points, plus 5 before, loses 1 step.
Roll(1d8)+0:
7,+0
Total:7
7+12 is 19, bear doesn't lose a step.
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Round 3, match tied!
Roll(1d10)+0:
6,+0
Total:6
Roll(1d6)+0:
1,+0
Total:1
Bear wins round
Roll(1d6)+0:
2,+0
Total:2
Roll(1d6)+0:
4,+0
Total:4
Wolf takes 3 hits.
Roll(3d10)+0:
8,10,3,+0
Total:21
Total damage 31, die size drops below d4. Wolf TKO.
Roll(1d6)+0:
2,+0
Total:2
Total damage on bear 21, bear reduced to d8.
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This might be still too stimulationist.
My goals was to ensure that two 1d4 creature's wouldn't TKO each other all the time, and but a 1d20 vs a 1d4 would quickly result in a TKO.
We could probably simplify things a lot. Give each monster a POW stat.
3 rounds. Start the round with 1d6+POW for each monster, report who is winning. Then roll 1d6 again to determine who wins the match.
6s explode, roll again.
You have to beat them by 2 to win a round.
Every 2 points you beat the enemy POW you deal 1 point of damage. Damage reduces enemy POW.
Best 2 rounds win. If a monster takes 5 points of damage, they are TKOd.
The "intermediate" 1d6 roll can be skipped for faster fights, or included to stretch out narrative.
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Wolf 5 vs Bear 7.
Round 1:
5+4+5 (14) vs 7+3+2 (12)
The round starts. The wolf leaps at the bear, but the bear knocks the wolf out of the air. The bear tries to follow up and finish the wolf, but the wolf is too quick and wounds the bear.
Round 2:
5+5+3 (13) vs 6+1+2 (9)
The bear attempts to crush the wolf, but the wolf cuts around behind, and leaps on the bear's back. Bear takes 2 point of damage.
Wolf has won 2. But this is a bloodsport, so we continue to the 3rd round. Bear's only hope now is a TKO.
Round 3:
5+2+6+4 (17) vs 4+1+1 (6)
The two duelists circle around each other, neither giving the other an opening. Then the bear is distracted by a loud sound, and the wolf leaps, tearing the Bear's throat out.
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Ok, that works better. The exploding dice add some drama, and the curve of adding up dice make differences increasingly important.
You can also do things like "trollblood monsters heal 1 damage per round", or a creature that rolls 3d4 (exploding) instead of 2d6 (exploding).
TKOs are possible, but far from certain.
3 round matches, 5 round matches, and to-the-death are all possible formats.
Win by round, or win by damage done, are possible bets.
If you replaced the Bear with a 12 power creature:
Round 1: 1 damage to wolf
Round 2: 1 damage to wolf
Round 3: 2 damage to 12 power creature
Even with the impressive rolls above, the wolf can't keep up.
