Tbh it really depends on what the devs have in mind for Syndesia. If they really want solo players to be a part of this world then the PVP toggle would not be a bad idea, but that in fact is basically what you have with the militias, so not sure how the Criminal System would fit in there. The militias are supposed to be at city level, each city having the possibility to create their own player militia (this what was said by the devs when Militias were presented last year), and who ever wants to join the Militia has the right to kill and full loot members of other militias without affecting their karma. This is basically the CvC that you guys were talking about I believe and also works as a PvP toggle as you only interact with other players that are interested in PvP. But again, this removes completely the need of a Criminal System and the danger for players that do not join a militia.
I think we all agree that the problem is not really that reds exist but the zergs that are being practiced. Considering that unlike other games the skills come directly from farming a specific mob and not by unlocking them just by gaining xp, the fact that reds are camping certain areas to keep the mobs in there just for themselves makes PvErs (not so used to PvP) and solo players unable to acquire certain KP and skills. I could suggest having a time slot where certain areas would be at peace, so that these players would get their chance to advance in the game. Archeage for example has a system like that for the not safe areas. There is a period of tension that according to the level of pvp on going there escalates up to war and then comes 1h peace. Not saying it has to work the same way, just throwing an idea and example there.
btw @Rife The devs already confirmed that there will not be sieges in Arb. They are still coming up with the system but it will not involve PVP.
