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Largest problem with pure badge loot is the same problem that arena points have. People will end up with their gear "capped" for the current tier level. And the more hardcore will get there faster and then burn out quicker.
I like the idea of a more tiered loot system with token turn-ins and the ability to fill out holes. I just think it should be able to backfill gear with less than perfect slots. So BT should drop badges of SSC, SWP drop badges of BT, etc.
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