Not necessarily. Just go unarmed, no weapon needed. The unarmed skill will then scale with your level to increase damage. Then they can just add affixes onto pre-existing gear for bonus to unarmed damage or something.
That's probably actually harder to balance and more boring at the same time. If your damage is tied only to your level, then you have the advantage over other characters in that they would need to spend money on upgrades and would be weaker between upgrades.
A lack of loot also means that your relative power must remain constant, you'll never become more powerful versus enemies of the same level. Attaching bonuses to unarmed to the same pool of lot that everyone else gets screws over everyone else who is not unarmed.
No, Unarmed would need to have its own weapon type.
