[quote=Seraph]
I thought of an interesting stipulation to the blade's potential. Hope this pleases you.
[/quote]

I wish I could wake up and think that sword is balanced, alas this is not a world where I can do that. 

So you are trading blood, KEEP IN MIND YOU OFFERED NO SPECIFIC AMOUNT, and in exchange for some blood you have the ability to completely shit on defenses formed via chakra, create wounds that will NEVER heal, and anything that you slice through is permanently damaged. Now I want you to take the next few seconds to think REAL hard about this, and really ask yourself if a little blood, sometimes maybe not even your blood, is a balanced exchange for all of this.

Go ahead, I'll wait.

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For the power of that blade and what it allows its wielder to do, you should be dead in thirty seconds. No shield too thick. No material too durable. No flesh too resilient. You have almost outdone some of these guys in initial template overpoweredness, and I am in awe that you are convinced that this sword can be balanced with the requirements you've created. You didn't remove a single thing, and I told myself I should've told you to, but I trusted you to look back at your sword and see how unreasonable it was for the lack of danger it presented for the wielder. You didn't. So, I'm going to propose some changes for you.

You're going to lose everything and rework it to one unique ability. Why not make a laceration caused by the blade be unable to clot as quickly, causing deeper wounds to pose greater risk of the afflicted bleeding out if not taken care of in time? Think its called Hemophilia. You want power, but unfortunately balance comes first, and I'm not letting you shit on everyone else's efforts without considerable life-threatening cost.