Oh, I love these ideas.
Item tax: use inns to log out, and charge a rent to store equipment. If you log out, after an hour(whatever time) you automatically return to last inn you stayed at, and charged a premium.
Item degradation: items should deteriorate and become completely broken. But repairable to some extent for awhile.
Skill based: instead of levels, use EXP to gain skills. EXP should be spendable on skills/hp.
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