
Heroshi |

As of now it's a green lightly glowing corrosive short sword. The corrosive adds 1d6 acid damage. Every time it gets a killing shot or a crit the glow gets brighter. At the time that it was available to my player it was too OP (level 1), so to try to discourage him from taking it I had an NPC tell him it was cursed. Surprisingly, four levels later, he has gotten his first kill shot with it, but not a single crit.
What I need is some good imagination on what will happen when it gets X amount of kills or crits. Or a percentage cumulative or not that activates said happening.
There is always the couple of people who say, "then why did you let him take it" so here's the story on that. They were to be saving a level 6 NPC at the time, but instead they stayed back. They are very weary of NPCs in the wild, and most of the time are over paranoid. The creatures attacking the NPC kept getting insanely lucky crits so after defeating the baddies she had low hp. They finally conversed with the NPC and the sorcerer said Eff it and magic missiled her. Luckily it was by a river so the rest of the gear was lost.

Ventnor |

I think instead of a conventional "here's a penalty" kind of curse, what you should is after having killed so many people, have that corrosive sword "wake up." An evil intelligence possesses this blade which encourages its wielders to perform darker and darker actions. What exactly is this evil intelligence? It could be anything, really...

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Are you searching for comical curse or simply something realistic? Maybe horror like effect? Perhaps a shadow of his body comes to life? If you are searching for something comical, perhaps sword can't be sheated properly because it melts everything it touches. Maybe the sword has been funneling some other monstrousity or sword is actually monster itself?
Adam

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A simple "fart" when he scores a critical hit might do and unlock the curse effect. Make sure you describe the scene well. I know I would :)
God, I can't stop laughing now. Imagine a adventurer with it. Wherever he goes, he farts unexpedently. A Stealth mission? Fart breaks it. A diplomatic mission? NPC is disgusted. Just horrible.
Adam

Claxon |

So here's what I'm thinking:
Every hit is corrosive. On a critical hit it actually unleashes a corrosive burst (not the enchantment) which deals 3d6 acid damage to everyone within 5ft of the sword (wielder included) 2d6 to those at 10ft and 1d6 to those at 15ft. Reflex save for half. It's powerful, but the curse is that it can harm you.
Alternatively, the kill has finally awakened it. It now needs to kill something everyday or starts causing con damage each day to the wielder. 1 point of con damage for each day it doesn't get to kill a worthy opponent (CR at least half the wielder's HD). It's an intelligent evil sword, but very low intelligence so it can only empathetically communicate with the wielder. If the wielder tries to not use that weapon he finds that it magically teleports into his hand instead of whatever weapon he wanted to use. He can only be be rid of it with a casting of break enchantment, limited wish, miracle, remove curse, or wish. The acid is slowly coursing through his veins, destroying his very body if he does not fulfill the swords will.

Abrisene |
On a critical hit, the sword plays "Pump Up the Jam", in Goblin, in a continuous loop and at an intolerable volume for the next 24 hours. (Or, use song of choice. Something to "shoulder dance" to, yet quickly becomes tiresome would be what to aim for).
This applies a -10 modifier to all Perception and Concentration checks within 30 feet. The same penalty applies to any task that requires fine motor skill or close attention, including Craft checks.
Goblins receive no penalty and enjoy a +1 to Hit, and +1 to all Saves as a Morale bonus.
No creatures, excepting Goblins, attempting to rest within 100 feet of the sword are able to gain the benefits of rest. One foot of wood, six inches of stone, or 3 inches of metal reduce this radius to 10 feet.
As you are in a Demon involved game, switch it to Demon instead of Goblin. If the curse activates in combat with Demons, have all Demons in range spend their next turns doing the cabbage-patch while commenting their feelings regarding their jam, then continue per normal. They, slightly buffed yet having lost an action, while the party sorts through their various WTFs.