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That would be cool. Maybe when you inspect a person another option is there that says DUEL. And you can both decide to put something for the winner from your inventory!
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Kind of like that old game called runescape!
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Wow, blast from the past; loved that game years ago. But yeah, some kind of duel system would be nice. To anyone who's ever played the first Borderlands, that's what I'd envision for a player duel setup.