So it's the passing of the torch but in doing so, he also set a bar that the next generation of heroes that they can never attain but I bet that contract will do something once the new generation breaks that ceiling. I do wonder what it's clear condition thou. Will it be related to the death of the current generation of heroes or something else?
One thing is certain thou, Rania is going to be the one to prepare the torch that will shine so brightly once the next generation receives it.
The contract allowed the creation of heroes that should be on par with Ganikalt. Every generation of hero after the first is the work of the contract.
The next generation after Kyle is already "chosen" - it's Chloe, despite not being a swordsman.
Death doesn't seem to be the condition which causes a hero to lose their blessing. Kyle's master lost his and ran away and was able to survive and mentor the next generation. Kyle was still alive for a while when Chloe almost got kidnapped.
We don't know how someone gets chosen nor how they lose the blessing. The three heroes we know so far aren't exactly model heroes, and one of them doesn't even use a sword. There doesn't seem to be a clear rule.