The economy of a PVP server is always going to stink without some sort of global bazaar type zone, or an EQ2 style auction house with a fence to sell between factions. Even if we hit 300 sustained population at peak (roughly double R99) which is a BIG if, you're essentially cutting down your customer base into 3rds (assuming 3 teams and equal distribution).
Discussions seem to point towards 0 interaction between teams, i.e. no trading, can't understand chat, etc.
Plus people, especially the large guilds, keeping massive vaults of backup loot in case core members lose items in PVP. I think you have to be careful though, with a small population you are talking about a MASSIVE influx of equipment. One Hate or Fear raid including bosses is gonna net you what, 15-20 pieces of gear and can be done every 3 days? It will essentially be the best armor in the game and also the most common, and would destroy the market for many low level items that level 20-40s can camp to earn the plat to buy the higher end stuff.
I think removal of the no-drop tag has to be able to stand on the PVP item loot alone or not be implemented.
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