The place could be somewhere close to the main road that goes into Khaldonia. It would create better rp and less actual pvp. Of course they might have to be someone roleplaying as the dragon, but there would have to be roleplay fighting. The Dragon person wouldn't be able to go out of a certain boundaries, so they couldn't go on a rampage causing mass destruction. Or there could be a teleport area that teleports to a specific part in the nether which serves at the "Dragon's pit."