My suggestion is quite simple, make one of the arenas (preferably the green one) a safe death at .pvp. I think it'll be a great way to draw players that would otherwise avoid pvp entirely out of fear of losing their items into that aspect of the game. What i've also seen quite a few players do already, is going into a match under the agreement that afterwards items get given back. Basically creating exactly this safe death scenario but ultimately leaving it up to their opponent to decide if they follow through with the agreement.
Overall just seems to me like it would be a great addition, the demand is obviously there. I also think it will bring more activity to the regular arenas after people have practiced and grown more confident in their skills.