(I have problems with the way that D&D 5E handles Alignment, Personal Characteristics [Personality Traits, Ideals, Bonds, and Flaws], and the awarding of Inspiration for good roleplaying. The system presented below is intended to replace all of those features.)
Instinct is a statement of your character’s mostly deeply-held belief, an impulse towards a certain course of action that reflects your core values. It concretely expresses the ideals that you aspire to and can guide you when you’re not sure what to do next. Instinct replaces the standard D&D 5E concept of alignment: morality is about the habits you cultivate and the actions that seem to flow most naturally from your world-view, not about a narrowly defined set of categories.
Example 1: Huan is a proud and haughty Noble whose uncle usurped the leadership of his family and sought to control him. He seeks power so that he will never have to be ruled again. Huan’s Instinct is: Defy an attempt by authority to exert power over you.
Example 2: Xi Leng is a curious and somewhat amoral Wizard who worked for years with a ruthless and power-hungry group of other magic-users. He is more interested in improving his knowledge and skills than in applying that knowledge and skill to help others. Xi Leng’s Instinct is: Better yourself or your skills through new knowledge.
At the end of every session, each player should remind the group of their character’s Instinct. If the group agrees that they fulfilled their Instinct then the character gains experience equal to a level-appropriate Deadly encounter.
Bonds are statements which bind a character to their fellow characters, to other people they know, or to larger groups or concepts. A character may have up to three Bonds at a time, which may be dropped or altered at the GM’s discretion (usually because of a development in the fiction).
At the end of every session, each player can nominate one Bond that they feel has been resolved (completely explored, proven or disproven, no longer relevant, or otherwise). If the player of the other character the Bond concerns (the GM in the instance of Bonds connected to concepts, NPCs/organisations, etc.) agrees that it has been resolved then the character gains experience equal to two level-appropriate Deadly encounters.
The question of how to define good roleplaying is one of near-infinite difficulty, with the answer varying greatly depending upon the goals, themes, and premise of a given campaign. In the case of an open-ended sandbox campaign (like Wild Seas Under Heaven), the story and the action is entirely player-driven and therefore good roleplaying is that which produces bold and decisive attempts to interact with and change the surrounding world.
Inspiration is intended as a mechanic to reward and encourage good roleplaying, but this requires that the players know the criteria. Players who know that there is a reliable source of Inspiration are more likely to use it rather than conserving it like a scarce and unpredictable resource.
The GM should reward characters who engage with the setting through their goals, and who take decisive action towards achieving those goals. At the end of every session the GM should assess whether each character has:
Established a new goal that is bold, decisive, or shows a real sense of purpose and agency. If the answer is yes, the GM should award Inspiration at the start of the next session. (Good judgement applies here: do not reward goals that are petty or meek, and do not continue to reward players who constantly set goals and make no meaningful effort to fulfil them).
Taken a meaningful step towards achieving a goal – reaching a significant milestone, discovering vital information, or taking concrete and tangible steps. If the answer is yes, the GM should award Inspiration at the start of the next session. (Once again, good judgement applies. When in doubt, seek the opinions of your group as to whether or not real progress has been made towards achieving the goal in question).