Since I started over I decided to save my pearls and not buy the second city deed in since you can just use artifacts. I just started being able to farm the level 5 cave and just got 1 artifact from it. Of course you need 100 artifacts to be able to build a second city or win the deed in the daily chance. If not from those options you need to spend 250 pearls. It seems as though you can only get them from level 5 and up. Not sure if you can win them from players or not yet.
I just confirmed that you can indeed earn artifacts when attacking other players. You receive artifacts in a blue package when you attack enemy cities. You can also earn artifacts in the cave.