Theories proven false

One popular theory is that you must be a member of the Uchiha clan to activate rinnegan and that you must then combine it with Senju (wood release) DNA but this was proven completely and utterly false when Kabuto reincarnated Madara using edo tensei and tried to combine his DNA with Hashirama's wood release, only to find that it didn't work, as Madara not only didn't get the rinnegan but his eyes melted.

We also know that you don't have to be Uchiha to be a reincarnation of Indra - you just have to be completely and utterly evil. Madara was a reincarnation as was Sasuke, and they were both in the Uchiha clan, but nobody else in the Uchiha clan was a reincarnation. Neither Itachi nor Obito were reincarnations of Indra, and two whole generations of Uchiha clan members were not.

We also know that you don't have to be Senju clan to be a reincarnation of Asura. Indeed, only Hashirama from that clan was, and in this case we know who at least one reincarnation was - Naruto - and he most certainly is not in the Senju clan, nor is he related to them.

Reincarnations of Indra

There are perhaps 100 generations between Indra and Asura to the present day, but we do know at least a few of the reincarnations of Indra.

That's a lot of non-Uchiha! I list Kakuzu, Orochimaru and Kabuto as 3 possibilities, though we don't actually know for sure. All of those reincarnations could be people who are yet to be exposed. All we know is that none of them were Uchiha.

Reincarnations of Asura

As with the reincarnations of Indra, there are probably 100 generations between Asura himself and present day, but we do know some of them.

I put probably for Nagato because, according to Narutopedia, Nagato could have awakened the rinnegan himself, as he was related to both Hashirama and Naruto. Indeed, as I will get to later, there is no certainty that he didn't awaken rinnegan himself.

Who can awaken rinnegan?

What restrictions are there for who can awaken rinnegan? As above, they need to either be personally given the rinnegan by Hagoromo or else they need to be either the reincarnation of Indra or the reincarnation of Asura. In other words, it isn't just Madara and Sasuke who could awaken rinnegan - Hashirama and Naruto could too. Indeed, going by the theory that Nagato was the reincarnation of Asura, which is a reasonable theory, Nagato could have awakened the rinnegan by himself even without Madara implanting it in him. Indeed, did Madara implant the rinnegan in his eyes? Madara says he did, but Madara is a liar who can't be trusted. It makes a lot more sense if Madara didn't implant the rinnegan in his eyes than if he did.

How did Madara awaken the rinnegan?

According to Madara, he awakened the rinnegan by combining his own DNA with Hashirama's, however this theory was proven false by Kabuto so we can dismiss it as false. At about the same time, Madara rescued Obito, an undoubtedly good act, and, per the actual real world theory of Rinne (which is a real theory that this is based on), it would have been Madara turning good by rescuing Obito that would have awakened his rinnegan, and have nothing to do with Hashirama's wood release DNA.

The real world belief of Rinne

Rinne is a real world belief that is known outside of Japan as Samsara, and it basically describes the reincarnation belief of Buddhism, Hinduism, Sikhism and Jainism, as well as a number of smaller religions. Fundamentally, it explains not only how karma works but also what the aim of reincarnating is, with an ultimate belief that the aim is to achieve enlightenment, which is achieved by having multiple reincarnations to teach your spirit a lesson, ultimately achieving enlightenment and reaching a position of a Buddha or an avatar, in each case essentially being a demi-God, or God on earth. While Judaism and the related Christianity and Islam don't officially have this belief, others argue that they effectively do, and that Mohammad (Islam) and Jesus Christ (Christianity) was effectively a Buddha or an avatar.

Rinne does not believe that enlightenment is achieved by purely good acts but rather by a combination of pure good and pure evil, having lived lives of pure evil and lives of pure good, and then achieving a true balance and understanding of the nature of life and the nature of good and evil.

What Rinnegan probably is

Most things in Naruto are based on real world belief systems, particularly as they apply to Japanese mythology, and also the related Indian and Chinese mythology, which affect Japanese mythology. Rinne is an Indian belief system called Samsara. Eight chakra gates is a real thing - though there are seven in real life - but Naruto added an eighth called "death". In all of Naruto's mythology it is very similar to real world mythology. Jiraiya is a Japanese story, and it involves Tsunade the slug demon and Orochimaru the snake demon - they didn't even change their names! So the idea that rinnegan in Naruto would move so far away from the mythology is very unlikely. While they are certainly allowed to do such things as making it Uchiha only and combining it with wood release only, it would be out of character for the series if that was the case, as that would be like a hack for how Rinne actually works, and it shouldn't work.

How to awaken Rinnegan

Who could awaken the Rinnegan and how?

How should we as the MUD deal with rinnegan?

According to Uchiha fans, rinnegan should be for Uchiha clan only and should be activated as a progression after awakening sharingan and then mangekyou sharingan, perhaps after mangekyou sharingan is at 100%, and then you have rinnegan and can dominate the game.

But if we did that then it'd make it pointless to pick any clan other than Uchiha and it'd ruin the game. But is that realistic anyway?

In the Naruto series, only 2 Uchiha ever awakened the rinnegan = Madara and Sasuke - and both were reincarnations of Indra. It was their status as reincarnations of Indra that allowed them to awaken the rinnegan, not their status as members of the Uchiha clan.

While to date officially Nagato got eyes implanted from Madara, I think more likely he awakened it himself due to being a reincarnation of Asura combined with a very traumatic upbringing that saw him turn from good to evil to neutral in a dramatic fashion at a very young age.

It is all about interpretations and if we are to allow rinnegan for players it must be for all players and that must be the interpretation we have.

One way rinnegan for players could work in the MUD

We could incorporate rinnegan in with the remort system as follows:

This system, or something like it, would be balanced, and would encourage players to keep remorting, while also making rinnegan so high level that it can be empowered to be as strong as it is in the series. It could perhaps require Yin, Yang and Yin-Yang release all to be at 100% proficiency, and perhaps some high level jutsu to be mastered, and perhaps awakened by killing many very high level mobs, or perhaps even meeting with Hagoromo and then killing genjutsu versions of Indra and Asura themselves or going on some complicated mission to find their essence.

There is essentially no reason why we must limit ourselves to the idea that this should be Uchiha only, or that being Uchiha has anything to do with it.

Indeed, even if the series were to tell us that it must be for Uchiha only, we probably should ignore it anyway, since that essentially means that we can't have a full-powered rinnegan in the game, and then leaves us with the choice of either weakening it so much that it is useless or never allowing players to have it.

How we could have rinnegan be Uchiha-only

As a basic idea, we'd need for all clans to have something equally as good as rinnegan, in order to justify a full-powered version of it to be Uchiha-only. Since nothing in the series is the equal of rinnegan, then this is impossible to achieve per the series and we would have to make something up. It could certainly be done, but it is impractical and overly complicated.

It is simpler and better to allow everyone to have rinnegan, or at least the chance of it.

How can we justify everyone having rinnegan

If we consider that Indra means evil and Asura means good, then every player is either evil or good. While some people may maintain neutral the whole time, at some point you have to kill good things for a while and at some point you have to kill evil things for a while. Alignment, per the score sheet, is nearly impossible to set to your liking and in many ways it is pointless to try.

But in terms of the real world application of Rinne, we can certainly justify it if we combine it with reincarnations via the fushi tensei. While a real world application suggests more like 1,000 lives, if we have 6 reincarnations then it fits the sage of six paths idea, and if we further combine it with Yin, Yang and Yin-Yang then we can justify this in roleplay terms.

I personally think that this, or something like it, is how we should do it.