I think a PvP Duel Arena based around the war in Cyrodiil with Alliance factions would be cool.

Combat in the Arena would be 1v1 or 1v2, against players from enemy Alliance. So for example, if you queue as an Ebonheart Pact character for 1v1, you get matched with an AD character OR DC character. If you opted for 1v2, you will get matched against 1 character from AD AND 1 character from DC.

The location should be an actual arena, preferably with some variety like environmental hazards, fall spots etc. It could work similar to how Battlefields work, where you are teleported in after queueing, with a timer before the Duel starts.

Now the clincher. The Duel arena could have a staking mechanic. The idea is that players who want to join the Duel Arena, bet X amount of gold. It should be set amounts, which will form a natural match-making system. For example, the lowest entry bet could be 5000 gold, going all the way to 100k (or beyond). If your entry bet is 5000 gold, you get matched with other players who bet 5000. If there aren't enough players betting at your bet level, you get matched with lower bet levels and are charged lower entry bet.

The winner receives half of the total gold bet as AP. For example, if a player bets 10k to enter into a 1v2, and wins, they receive 15k AP. This will:

1. Add a significant gold sink to the game
2. Add a gold to AP conversion method with 0.5 exchange rate
3. Speed up Grand Overlord progression with high risk, high reward bet mechanic

Additionally, a weekly scoreboard tracking Duel wins per Alliance can be implemented. The idea is that the gold removed from the economy will be tracked as points for the Alliance for the winning character. The "points" will actually just be Gold, raised by the Alliance for their Warchest.

For example, if a DC character bet 50k on a 1v1 and wins, 100k is added to DC's total for the week. If an AD character bets 100k on a 1v2 and wins, 300k is added to AD's total for the week. We can easily track how much gold has been removed by this minigame this way.

The faction that received the most points for the week will receive bonuses in Cyrodiil AwA for the next week. It should be tangible benefits like:

1. 20% bonus AP
2. x1.5 scoring bonus
3. More siege damage
4. Slight buff to Battle Spirit called Enhanced Battle Spirit - Damage taken is decreased by 50% (instead of 44%)
5. Increases Weapon and Spell Damage by 2%.
6. Increase Weapon Critical and Spell Critical by 3%

Potential lore explanation:

As the Alliance war has been dragging on with power constantly shifting between the three Alliances, their Warchests have been running dry. The military leaders and spies of the Alliances negotiate a deal when they met at High Isle to form an honorable Dueling Arena.

While the nobility argue for it as a safer alternative to large-scale war and destruction and a step toward de-escalation, the Spies secretly see it as an elegant way to fund their own Alliance with money from the other Alliances.