This would introduce 2 new mechanics: Equipment quality, and a new blacksmith NPC that could be found in towns.
When an item is created, it would have the option to drop with one of two qualities.
These would include Pristine, and Regular. Lower quality tiers include Damaged, and Ruined.
If a player dies in a danger zone (Anywhere where the death penalty applies) their equipment will be brought down a tier. This would go from Pristine to Regular to Damaged and then finally down toRuined. Items of the 2 lower qualities would have reduced stats and overall would look worse. Equipment downgrades could be lightly mitigated through cleric resurrection, although some of your equipment still might get damaged and go down a tier post-res.
Pristine items could be obtained through any method of obtaining an item. Shops, bosses, you name it. They could drop as Pristine items, or as Regular items.
A Pristine item would come with a percentage-based bonus to the item’s damage or defense, ranging from X-Y. They could even drop with special perks exclusive to items with the pristine quality.
Regular items could be obtained the same way as pristine items, albeit much more often. They wouldn’t be special.
Damaged and Ruined items would be unable to be obtained from drops or shopkeepers. They could only be created through a player’s death. You could also buy Bootlegged items, which would be incredibly cheap but would look hilariously ugly and would be locked to the quality of Ruined items. Not even a blacksmith could fix a Bootlegged item for you.
The blacksmith would be a non player character inside of major cities and towns. He / She could repair your items for a large fee. This fee would exponentially get larger depending on how many scrolls the item has applied, or how damaged it is.
If the item has been damaged and repaired before in the past, repairing it will be more expensive. If you allow your item to be damaged beyond the Ruined quality, it will keep its stats the same but become more and more expensive to repair on each death.
If you decide that you want to upgrade your Regular item back to pristine, you would need to pay an even larger fee. It would probably be cheaper to test your luck and just buy more of the item from the shopkeeper in hopes that you get a Pristine item, but that has the risk of not giving you a pristine item at all. If an item was created as Regular, it will have a chance of gaining a Pristine item perk along with the random stat bonuses granted by the quality. If your item was Pristine and got knocked down to a lower quality, you could bring it back up for an exorbitant fee. Doing this would not allow the item to get a Pristine item perk, and would always give it a lower bonus than the pristine item originally had.