This may well have been suggested before, but here you go:
As stated in another thread Karma bares no purpose. What if it did? Would it not be pretty awesome that if you delve to much into negative karma you are accepted by the pirate factions! This in turn would mean that you no longer get attacked by NPC pirates but instead the police et al would turn their guns on you. This of course would mean that you could no longer dock at the regular stations, as you would be attacked on site, so there would have to be a station for each of the pirate factions. Each of these stations will provide loyalty contracts just the same as the regular stations, which provides which doesn’t really matter atm.
Naturally open space would have to be expanded on to accomodate all the extra sectors for this to work, along with tweaks of what NPC ships spawn where.
As your karma level increases in whichever direction you will be assigned more dangerous, yet profitable, missions delving deep into ‘enemy’ territoy. Maybe even have it so that you unlock skins for each level of +/- karma you attain to show off the level of karma standing you have.
A Bounty system could also be introduced. As you eliminate good/pirate players you will start to rack up a bounty and any player that takes down a player with a bounty will get the rewarded (maybe reward all who help to take them down). Once the player with the bounty is eliminated their bounty is reset to 0, if the player is killed by a NPC then the bounty remains. As a players bounty increases so does the alert level when entering sectors controlled by the opposing factions. When this happens players will get notified that a high threat target has entered a sector. This could be tied into the karma levels, if you have a max + or - karma standing you will get notified earlier than players with a lower karma level. When I say earlier I mean by sector.
The bounty system could also work in a different way for farming NPCs. After x amount of kills NPC bounty hunters will start to track you down and try to take you out.
Anyway, what do you think?