I have been working on developing an inter-alliance competition for a while now. I will contribute in-game prizes such as gold and saddles, and other players have also expressed a desire to contribute. I envision this as a competition between relatively evenly matched alliances, although it could also be engaged in between "sides" made up of multiple alliances as long as the alliances were NAP'd/confed with other alliances on the same "side" and NOT NAP'd/confed with other alliances NOT on the same side.
The format of the competition would be as follows:
1) The tournament objective would be to "siege" and "capture" designated cities from the other alliance. This would be done using the fact that it is possible to siege WITHOUT the use of siege engines so that no actual damage to the city takes place.
My idea would be that certain players from each alliance would volunteer to have their cities be "targets." Limitations could include only players with 4 or more cities as targets and only cities over 1k population targeted, or no limitations. The reason to limit it to only the cities of certain players is that alliances might have players on leave or inactive or who don't want to put in the time commitment, and we don't want to make this less fun for those players.
2) One point would be awarded for each hour of siege on any target city beyond the 12-hour set-up period.
3) Sieges that were maintained beyond a 48-hour period would result in a city being declared "razed." 50 points would be awarded to the sieging side and troops and diplos from that city could no longer be used in the competition.
4) Scouts and spies could be used against any player or encampment (or to protect any player or encampment) of alliances participating in the competition.
5) Assassins could be used only against encamped forces (when this feature becomes available) or the cities of the players designated as "targets."
6) Thieves and saboteurs would not be a part of the tournament
7) "Sieges" would be required to travel a maximum of 10 squares per hour (no sieges using swiftsteeds, lol). This is faster than sieges would travel in practice, but in my mind would increase the fun quotient a bit by increasing the pace without making it overly difficult to reinforce other players.
8) Alliances not involved in the competition cannot help with military or diplomatic attacks, but can contribute resources to underdogs and cheer or mock from the sidelines.
Anyway, that's the basic outlines of a challenge I think would be fun, and of course all the rules are just preliminary thoughts and subject to negotiation by participating alliances. The goal would be to maximize fun for all.
If your alliance is interested in participating in such a tournament, please contact me by in-game mail or just post here.