I like this idea of "testing" to achieve your next level. To some extent, at least. It reminds me of my old days of studying Tang Soo Do. You'd be ready to advance to the next belt...but you had to test for it first.

However, my favorite martial arts experience was in a much more laid-back environment. While studying Kempo Karate-Do, every class was a "testing." If, at the end of the class, Sensei thought you should advance...you advanced that day, right there. This has the big advantage of encouraging the student to perform their best at every moment, not just at the testing. This is the way I percieve the current XP system working. You get voted up if you do well (okay, so I'm an idealist...). Not having "tests" encourages all of us monks to put forth our best all the time.