Increase Max Karma to 1m and 2m to negative Karma (needed for the math, altho it can work in it's current form by adjusting the numbers).

Make 2 types of servers, 1/2 Karma Servers and 1/2 Karma Free Servers.  Karma can only be gained or lost on Karma servers.  And no Karma buffs for non Karma servers.

Add a stacking death timer for PvP deaths on all servers that can be bypassed by Tears, to hinder Karma bombers.  Remove Crystal Breakage on PvP Death if negative Karma.

When positive Karma on a Karma Server you gain a Drop rate buff proportional to the amount of karma you have, that can go negative with a drop rate penalty attached.  For every 10,000 karma you get a 5% drop rate buff, so that at 1,000,000 karma you have a 50% drop rate buff.  This means that if you are Negative 2,000,000 Karma the first mob you kill will have a 0% chance of dropping any special items until you get to at least negative 1,990,000 Karma.  Make Karma not effect Trash at any point.

Arsha will function as a Karma server but you can't decrease your Karma via PvP, meaning that you get + drop rate from your Karma being positive and then an additional 50% for it just being Arsha.

Any 0 PvP servers (IE oliva, Seasonal PvE) should be considered Karma Free servers and thus get no Drop rate buff from Karma.