Thats a great Idea. Instead of many items to collect and flood the market. Much like points added up from donating to library your points for killing monsters and defending towns can be turned in for various items marking the event. For example trophies marking the begining and ending of the war. Or like you said sashes. But make these items 1 per char. So you can only get them once for each of your character.

Even more perks would be your name engraved on the trophy. So you would be more inclined to keep it. Of course this requires more work from EA but its always fun to talk about stuff like this

now if you wanted to create work with this idea you can take this one step further.
decide what is more likly to attack where, ie Cove gets hit by Orcs, Yew undead, each having there there own grade of points. You can only use the points earned at Cove to spend at the Cove reward system, with perhaps the first 1000s earned entiling you to a defender of Cove coin. The same with each town, points are not tranferable to other towns. To get a defender of Sosaria coin you have to collect a coin from all towns and hand them into someone at Brit castle for 1 Sosaria coin. once you have handed in your coins you are entitled to start collecting your city coins again, so you can only have a max 1 of each at any given time. You could then have a Cove Plate which cost 1000 Cove points + a Cove coin, with this repeated over all cities, then of course theres the defender of Sosaria plates. Then over time other items can be added. That would cause a few programming headaches I guess.

Yes but once ints done it would be easy to add different items over time.