[quote=@Dead Cruiser]
I'm pretty interested in this. Now I'm plumbing the depths of my character repertoire, trying to find something suitable.

Questions. What will be the extent of player interaction outside of these 1v1 battles? And should a player lose a battle, will that have them removed from the RP? What sort of power level will you be looking for with these characters, to avoid obvious imbalances?

A potential flaw with the current battle system has me thinking: unless a player can "win" a round, their input in the RP is very limited. Essentially you aren't even permitted to control your own character after a certain point, and your input has been removed and delegated to another player. A key principle of game design is that players hate to have control removed from them, and so this is striking me as a red flag. 
[/quote]

Glad to have piqued your interest!  I hope I'll be able to give you the answers you seek:

1. There will be lots of player and world interaction outside 1v1 battles.  In fact, the 1v1's aren't necessarily going to be the end-all, be-all; the main focus will more than likely be on individual character journeys through the City of Echoes.

2. Not by any stretch will somebody be kicked out.  Firstly, since loss is ultimately determined by loss of soul, a loss doesn't necessarily mean death.  A character deprived of their soul can continue exploring the city, perhaps as a teammate for the person with which they're now allied, or they can go their own way.  A player whose character dies can start again with a new character, come to the City of Echoes as a spectator, looter, mystery-solver, or whatever, and do all sorts of things...or, the dead character may be revived.

3. As for power level, it's very difficult to pin down even a concrete definition, but I would tentatively say 'mid-low'.  Superhuman physical abilities, good weapons, powers, magic, are all possible--we're definitely not starting at D&D level one.  Basically, I want people to start with what they need to be cool and really convey their characters.  I can better define what I'm looking for when I'm given specifics.  That is, I'll provide feedback when a sheet is submitted to me

4. Given the extent to which players will have roles outside of the 1v1s, I don't think that a huge portion of the RP experience will be locked away out of player control.  The results of losing rounds and ultimately a battle will be very important, but both in a fight and out, its how you adapt and deal with the challenges that come your way that really define both the character and the writer.  For instance, a player might get off to a bad start and lose the first two rounds of a fight, ending up with a character who's pretty much crippled, but ingenuity and fighting spirit to overcome a bad situation can earn votes even if the player's overall writing skill might be less.  As I mentioned above, as well, characters who lose badly may get new leases on life, the freedom to do entirely different things.  Just of the top of my head, a character near death may be taken in by a mysterious stranger and rebuilt as a cyborg, given new abilities and, in payment, tasked to hunt down another player character on the other side of the city.  I'm hoping that every victory and loss will be a springboard to a new and fun chapter of your stories.  So, a loss shouldn't by any means indicate a loss of input.

One of my goals is to allow for real character growth.  This isn't going to be some dime-a-dozen weekly cartoon where each episode has one adventure, separate from all the rest, and nothing really changed.  If the character that goes into the Crucible is the same one that comes out, I will have considered it a failure on my part.