Interesting conversation so far.
@luke-turbulenz instead of linking death penalties to EXP (which would have diminishing returns at higher levels) can it instead be tied to skills?
Right now, death penalty reduction is annoying because there are substantial investments made by players in (coin/time) to have their items. Keeping them in good condition is a main part of the game.
What if when you died (at any level) the result ‘froze’ for a time some of your skills?
This would impact all character types, since we all rely on skills. This could stack, freezing more skills if you die over and over.
This would be a ‘pain’ , but it wouldn’t provide a game advantage for reducing the death effect.