From Starbounder - Starbound Wiki
Death occurs when the player's health drops to zero.
Damage is taken when a player engages in combat, and is attacked by a hostile mob. Stationary damage from entities or environment can also take place, such as from a Sawblade Trap, Lava, Poison, or going to a planet without the required Protection Pack.
The penalty for death is determined by the difficulty mode selected for the current character.
- In Casual mode, there are no death penalties, but 10% of pixels are still lost.
- In Survival (default) mode, 30% of pixels are lost, and all items except for tools and weapons are dropped at the location of their death.
- In Hardcore mode, the current character is permanently disabled, and the player cannot play this character again.
However, items are not dropped in instanced missions. If a Hardcore character dies in one, all items they are carrying are permanently lost, even in multiplayer. also your device looks frozen.