I think it would be fine to have an item binding mechanic that was tied to upgrading/customizing items. Like creating an item with a custom fit that has some advantage, but can no longer be traded, or items that are somehow visually customized but then belong distinctly to that character.
What I absolutely do not want is some kind of durability system where items are guaranteed to be permanently destroyed at some point, because that creates a treadmill that makes the game feel pointless to me, and anything that is hard to obtain simply becomes the domain of the people with the most free time, since it has to be obtained again and again, rather than something you can work toward at your own pace.
My favorite kind of system for getting lots of old items out of circulation are systems where you can upgrade items by using other items. Like, you could upgrade a low level item all the way to a higher level item by successively fusing higher level equipment into it until you've gone through the whole progression of recovering items, but you've used them to upgrade something old rather than constantly swapping things out. That would allow the game to introduce unique items early because they could be upgraded to stay relevant. It's a lot less dead content when you can find something that can be upgraded all the way into a viable endgame item right away.
I said something of the same as well:
I like the idea that you could personalize and upgrade or otherwise enhance an item, then it becomes character/account bound/BoE/otherwise removed from circulation OR you can leave it at base stats and it remains tradeable (even if it was equipped). How will such an upgrade system be governed and executed though? Would a skilled crafter be required to perform the upgrade, then how would the item be traded?
Loot is so scarce in this game (the good stuff, mostly because of the rareness of a lot of named mobs, if you even manage to find one paired with chance at one of several or NO items in the case of semi-rare mobs), so having a BoP system is something I am absolutely against as the scenario is often this: Find a rare spawn, hunt it, get loot, not what you want/for your character etc, trade said rare for other equally valuable rare that you do want (assuming you solo'd the mob or it was a party effort and you won a greed roll, no 'needs'). So I'm cool with maybe some sort of agreeable BoE system. This allows items to be traded around a bit, but not indefinitely.
They aren't going to do a gear-loss system. Undone said so many times on discord. Idk why tools can be broken, doesn't make much sense or add an ounce to the desirability of a provisioner. Provis is all about food/tea and pots! Those are high turnover items.
Atlantica and other games had a system where you could combine 2 of an item at a given enhance tier to reach the next tier. This would soak tons of items out of circulation and give them purpose aside from just being pawned to a non-existent npc through a merchant table. That's another great way to sink items out of the economy. A +1 requires 2 items, +2 then requires 4, +3 8, and so on. Eventually you would require additional enhancement resources and/or chance for failure or even item loss would become a possibility.