It’s not tiered badges, as you suggested. It’s a currency,
“The currency used to upgrade Mythic Keystone gear is Valor, which is earned from completing Mythic Keystone dungeons, or by doing covenant Callings, with a weekly cap. Upgrade costs will vary by item slot and will be consistent across all item levels.”
I even guessed KSM correctly,
“Want to upgrade to 220? Kill Sire heroic or have an average of +15 time keys (KSM).”
"and then to item level 220 by completing the “Keystone Master” achievement for all +15s in time. "