The death penalty in New World is that all of your equipped items will take damage and lose durability when you die.
So what this means is that when you die, any weapons, armor, and tools you have equipped will become damaged and have lower durability. If left unattended, these items will eventually break and become unusable until you repair them.
Luckily you can avoid the cons of dying by simply repairing your items every time you die. You can repair items by right-clicking on an item in your inventory and clicking the repair option.
Related: How to get Life Motes in New World
However, to use the repair option in New World, you will need repair parts or repair kits. You can get repair parts by scraping useless items you don't want anymore, and you can make repair kits from repair parts via a crafting workbench.
Both methods will work and repair your items, but using repair parts will also require you to use gold. Because of this, repairing items using repair parts can become quite expensive if you die a lot. So to counter the costs of using repair parts in the long term, you should instead use those parts to make repair kits.
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