I love this idea. Pankration is great fun, doubly so because there's the appeal of finding a good monster to photograph and hunting for the best plates you can find, as well as the battles themselves. I'd be in favour of any new rewards.

So far the only real rewards are the beastmen hats, I suppose - so why not focus on "upgrading" them with jettons? The first upgrade will implement the costume idea, transforming you into the monster in your official reflector, the second gives the movement speed... and you could add pankration-specific enhancements too, like removing the "Vs. Family" restriction on the original hats, or even allowing soul plates of beastmen taken whilst wearing the hat to be transformed into reflectors. So many exciting possibilities!

Basically I want to be able to zoom around Vana'diel as a light elemental or a malboro whilst wearing a silly hat, lol.