Ok so i cant help but be a little concerned, since at level 92 you have no reason to want an exp bonus, so PvP will likely be left off, especially for merchants. I'm proposing that after a certain level you will see a drop-rate decline with pvp off, as opposed to a drop rate boost for PvP on since i think drop rates are high enough already!
Merchants...need more reason to level, both for gathering and crafting, and need their own reason to flag for pvp, since they'll never actually try to pk anyone.
EDIT: ok this is especially true if having PvP on means ANYONE can attack you (aside from same-alignment) i assume anyone who attacks someone with PvP on becomes flagged? for how long?
I'm wondering if maybe... It could be that theirs an evolving buff/debuff thats reset when you flag/unflag. After X level, you slowly start to lose drop chance, flagging for pvp causes it to slowly go back up (based on killing stuff while flagged/unflagged)
Unflagging from PVP instantly resets find bonus to 0.
Alternatively... Maybe some good'ol fashioned Good vs Evil incentives, like a neutral city that can be captured and held by a particular side. So to take it/defend it, you need PvP on. Since cities are hard to build... could use existing structures. Sorc tower, White tower, Orc Fort, Evil town (above the marsh) and the big city in the south that nobody really goes too. All places that could change hands, maybe with a banner to capture or a boss to slay.
UPDATE: "
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If you are opted into pvp any player enemy may attack you, (That is to say there is no more level spread pvp, it is open)"
I took this to mean that anyone who is flagged for PvP can be attacked by others (who would then be flagged) but i guess not. Cant actually see who is flagged for PvP either :(