Damage, Healing, and the Husk
Take enough damage and you go down. Here is exactly what that costs, and what it does not.
Healing
Out of a fight your health climbs back on its own: 2 a second, starting 5 seconds after the last hit landed on you. You are never stuck waiting forever, but that clock restarts every time you are struck, so you cannot heal your way through a brawl. Stepping back to breathe is a real move. Your Resistance stat is a bigger health pool and a smaller hit each time.
Going down
When your health hits zero you become a husk: down, frozen, out of the fight for 8 seconds. Then you wake again.
What death costs
This is the hard rule of the world, so read it once and keep it: everything you are carrying drops where you fall. Your whole trough and the gear you were wearing spill onto the ground on the spot.
The pile is yours alone for the first 3 minutes. Nobody else can touch it in that window, so a death far from home is a race you are allowed to win: wake up, run back, and take your own bag. After those 3 minutes it opens to anyone. After one hour whatever is left fades for good, and the world is that much poorer.
You do not have to remember where you fell, either. The world drops a pin on your death site and holds it there, and that pin survives a disconnect, so you can close the tab and still find the spot tomorrow.
Two other things happen. Your stat points are knocked loose, every point above the base refunded to spend again from scratch. And you wake in one of the world's three safe hubs, picked at random: the town, the Foal Pen or the Crossroads. Your gear takes no damage from dying.
Dying inside the guided prologue is the one exception, and it still wakes you where the prologue began.
What survives
More than you might fear. Your level and XP are yours for good, your gloo stays in your pocket, your land and stable stay yours, and your home stash, the chest at your built stable, is untouched by death. That is the whole point of a stash. What you were carrying is the only thing on the table.
Practice never costs you
The training yard is the exception. It is there to teach you to fight, so going down in it does not take your bag. Lose to the practice badger a hundred times and you keep every last thing.
The other kind of going down
Being knocked out by another player in the Arena is a different thing from dying, and it follows different rules. A wager duel costs you only the stake. An open fight out on arena ground drops your bag with no owner lock at all. Read that page before you go.
Bandages
You can patch somebody else up. A bandage is crafted at the workshop and used on another player standing within two tiles of you, healing them for 40 percent of their health with a ten second cooldown between uses. It only works on someone who has actually taken a beating, below half health.
Bandaging a hurt player earns hero standing. See Heroes and Villains.
The lesson
Do not ride out heavy into danger. Stash what you cannot afford to lose, carry what you need, and pick fights you can win. See Fighting.