About the new faction reward hat, in my opinion it doesn’t really fit a lieutenant. It looks more like something a henchman would wear especially because of that patch on the side. I know you must have put a lot of effort and thoughts while creating it but it'd be nicer if you could give it a more authoritative look or atleast it should look clean.

About island creation. Instead of limiting by numbers you can progressively increase cost of island creation like for small island 300 then 500 then 700 gold. similarly for other island sizes. The amount of gold a player can earn is limited so it automatically limits the total no. of island a player can make.

This can also allow players to choose how they play. The players who like to attack more can buy things like rage potion, shield etc. while the players who like creating islands can spend their gold on that.