just a couple rules I'd add:
ARENA---------
-30% damage cap (regardless of what happens, you can only receive a max 30% of your hp taken my a single hit)
-50% damage cut (whatever the same dmg would be in pvm, is halved for pvp)
-50% penalty on specials and enfeebling magic
-once flagged for pvp, bonuses from parties are canceled
-2 minute weakness applies to death. you will die, and be ejected from the arena with a knockback effect....or maybe just be resurrected on the sidelines ^^ (kb effect ejection would be funny tho)
-armor damage is nullified to begin with (or doubled, if we feel the need for a penalty to deaths)
-no diminishing effects on enfeebling magic, or effects from specials
-healing or buffing another person that is flagged, should flag you immediately
-recharge on potions, elixirs, etc. should be cut in half (not everyone has heals, this helps with some balance)
-flagged players running out of the arena to the benches while engaged in combat are not safe for 30 seconds.
DUELS---------
-target player type /duel to request a duel
-other player must accept from a yes/no box that appears not in front of them, but to the side of the screen.
-you have the option of disabling duel requests. default is disabled
-once a duel request has been denied, there is a 5 minute cooldown before another can be sent to that same player.
-once a duel is accepted, a 40 yalm event circle shows on your mini-map, and the 5 second countdown begins.
-all duels take place within a 40yalm distance of the player receiving the request, if you run out of this area, you lose the duel.
-arena dmg cap rules apply
-a duel is won when someone reaches 1 hp, you do not die, but a notice is given in vicinity that you have lost. "Giit loses the duel to Somerandomlol" loser will /kneel ofc
FUTURE STUFF----------
-you may be able to use GC seals put into a betting window to be received by the winner.
-statistics for your duels may be posted on the LodeStone
-full on LS v LS battle events
-cross server pvp? (possible in the future?)
-etc
I'm sure there's a ton more, but it's a start. :P