Instead of lost everything. A good idea is a player kill other player (with similar level), the enemy give Experience (like kill a mob from the same level x2 (maybe?)) and give a "PvP Coin" this PvP Coin give you different equipment/mounts/items related to PvP
I think that's the best option, a full loot on a MMO is a terrible idea, i love Full loot games, but in scars of honors i think is not a good idea