A mechanic that I thought worked well in the game called 'Planetside', was an XP bonus (we could also make it coin, or drop rate/spawn rate, etc) for the lowest population faction.
For example, if at launch we had..
400 evil
200 neutral
200 good
Good and Neutral would both get a +20% XP bonus, and +20% coin drop. It would scale according to how big the numbers advantage is.
New players would be warned about it before picking a faction, and you could only have 1 faction per IP.. Yes, there are ways to circumvent that, but most players wouldn't bother.
If it ever got to the point where Evil is still just mollywhopping the server, we could MERGE good and neutral, and just make it a 2 faction pvp server. Not ideal, but it's an emergency solution if we ever need it.
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