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Frequently in SAO, players discuss how loot, items, and money will be dispensed when grouping or teaming up.

In MMOs that I've played, loot is divvied up by the system to each player based on what they kill. When you get to a high enough level to get magic items, then there are methods for each player to lay claim to the item, and the system determines who gets it.

In SAO it clearly must be different. In season 2 episode 21, this comes up with Asuna and the Sleeping Knights, when they forgot to give her her share of the loot from killing the boss.

The system has no way to know who was an original member of the party; does that mean that the party leader gets all of the loot and then distributes it?

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Yep you are right, but I will give you the details just in case. According to MMO's I've seen/played, I think it works like this: Anyone can take the loot and item drop, so if any member takes it and doesn't distributes it then you can't do anything but to beat/kill him and as you know killing a player does provide any drop item or loot. So there is a system of chosing a player that everyone has faith in as the leader (in SAO anyway, but in the games we play the one who creates the team is the leader) He has to distributes the loot and drop item. Whether he distributes it evenly or give them their share according to their work is up to him.

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In SAO the drops are assigned to the players who took part in the group with other players getting no knowledge of what dropped. There is also a bonus item for the person who gets the kill shot. I think this is also the case in other games based on the seed but that has not been brought up before.

https://swordartonline.fandom.com/wiki/Sword_Art_Online_Light_Novel_Volume_08#A_Murder_Case_in_the_Area

Following the meal, the two began discussing ways of handling cases of rare drops in Sword Art Online, as the lack of logs tempted players to keep their drops a secret from their party members

I can't find the quote but in that series it is mentioned that the knights of the blood oath have a rule that who ever gets the drop gets to keep it.

Another point for this is that on the first floor boss at the end it is discussed that whoever gets the final blow gets a last attack bonus.

https://swordartonline.fandom.com/wiki/Illfang_the_Kobold_Lord

Illfang the Kobold Lord was slain by Kirito, who gave the final blow to the boss, and received the last-attack bonus item

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