This semi-domesticated aquatic offshoot of the black dragons is a product of selective breeding. While their breath weapons, wings, and legs were bred out of them centuries ago (mostly to protect their owners) and they are generally too isolated from their own kind to learn magic, their main appeal is that they grow to enormous and peasant-intimidating size at a ridiculously young age. There are dozens of known strains, and subspecies with unusual features such as venom sacs, goat horns, tentacles, and chameleonlike-skin have all been reported.
The powerful lords who own and trade moat dragons generally house them in palisaded pools or moats far too deep to escape, and have the animals killed when they outgrow their enclosures. On rare occasions, however, they escape or (even rarer) are released into the sea, where they grow bitter, ancient and coarse-scaled in the deep water, develop algae-filled beards and vast, flowing fins like tattered warship sails, and learn strange magics from the cold and cryptic things that sleep far beneath the waves. Such creatures, while no longer "moat" dragons, are so rare as to have no common name, and the few who have seen them, for panicked seconds, can perhaps be forgiven for not taking the time to thoroughly detail the many differences between the ancient moat dragon and the Eastern Sea Dragon or Lung Wang.
So this monster addresses two "problems":
(1)--There are dragons in moats in medieval art and stories, but not in the game,
(2)--If it's Dungeons and Dragons then low-level players may well wonder when they get to fight a dragon. And not some little not-quite-a-real-dragon like a five-foot-long wyrmling or a pseudo-dragon. So the moat dragon is a full-size, honest-to-god dragon that low-level PCs might actually have a chance with. However, it's visually different enough from standard dragons that it won't spoil the reveal when the serious villainous reptiles show up.
Now, as it says in this article:
There's a natural tension built into the notion of a monster that you can fight at low, middle, and high levels. On the one hand, scalability adds a sense of continuity. But if every monster is perfectly scalable, players don't get the sense of dread from knowing they're facing a particularly tough monster. Most D&D players shudder the first time a beholder comes floating down the corridor. But if they've been fighting 1 Hit Die beholders from their very first session, the 11 HD version is just another monster.
So, basically, that means I'd take care--when using this monster--to make the PCs realize that a moat dragon is a different and far less sophisticated animal than its land-dwelling cousins (thus the tentacles). Oh, that thing you just killed? That was just a moat dragon--didn't even have any spells.
Ordinary young moat dragons have as many hit points as they need to have in order to put up a decent fight with your PCs the first time they meet one (and they have whatever armor class, too). Offensively, beyond maybe the occasional drown or gore attack, they do roughly what you think a big sea snake would do.
Ancient moat dragons are some serious arcane mythic Lovecraftian shit and should be statted accordingly.
Images: Photo from Claire Nouvian's (rad) book The Deep, the Tom Waits -looking dragon painting's by Piero di Cosimo, the hit location sketch is by me, and the etching is by somebody who's dead and will probably be ok if I don't credit him.
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