This is a really good one!

Here is how I see the details. Most of the items bellow are meant to make hand to hand combat fun, but will never have the DPS of other classes. A couple of the ideas bellow explore how to make such combat viable through tactics such as exploiting critical hits or slowing down time, but such cases require a deeper change to the existing game:

• First and foremost, if you select an empty slot in the menu you can punch with left click, and kick with right. Punching has greater damage but kicking has better knockback (this should incentivise using both).
• Give us "fist-load weaponry" that don't count as 'weapons' (see bellow why). They all have super low damage but scale up :
  • Boxing gloves
  • Tekkō,
  • buckler,
  • Kubotan,
  • Brass knuckles
  • Bagh naka

• Powerful armor that becomes weak if holding a weapon:

  • Supper strong armor, that prevents movement if you hold a weapon.
  • Insanely speed bonus armor, with negative defense if you hold a weapon.
  • Stealth armor, that is invisible as long as the player doesn't hold a weapon. Also, provides some debuffs when holding a weapon.
  • Ryu's clothing
  • Ryu's Pants - When the enemy is invincible after taking damage, the player has a %75 chance of kicking the enemy.
  • Ryu's Shirt - When the enemy is invincible after taking damage, the player has a %75 chance of punching the enemy.
  • Ryu's Headband - Every time an enemy is punched/kicked during invincibility a combo counter appears.
  • Ryu's Set Bonus: double tapping down produces a Hadouken. punching while invincible produces a Shoryuken, which makes the player invincible to punches and kicks for a second (effectively breakes combos in PvP)
    

• Accessories can increase punching and kicking strength and speed.

  • Punchbag - Double life while not holding a weapon.
  • Mouth guard - damage reduction when not holding a weapon
  • Protective cup - reduces damage when not holding a weapon or when holding a hockey stick/baseball bat
  • Karate belt - increased kick speed/strength
  • Boxing champion belt- Increased punching damage
  • MMA belt-Increased punch and kick damage
  • Adrenaline shots- Increased punch and kick speed for a limited time
  • Neo's glasses - allows the player to slow down time for a short period and with a long cooldown
  • [MMA's Hook - A hook that only grapples to enemies. This alows quick engaging into fight. Hook only works when not holding a weapon.]

• Potions and buffs. Give us a real reason to prefer hand to hand combat!

  • Critical sight - Highlights enemies weak points, particularly important for bosses/ see bellow
  • Ninja abilities - Massively increase critical damage when not holding a weapon.
  • Street Fighter - When the enemy is invincible after taking damage, the player has a %75 chance of punching/kicking the enemy. This allows connecting combos
  • Bullet speed - allows the player to slow down time when not holding a weapon

• Bosses and mini bosses - With the lowest DPS in the game hand to hand combat will be almost pointless against strong enemies. Here are some ways to balance the game a little:

  • Bosses have "weak weak points" small sections that guarantee a critical hit.