Here's the idea: forget leveling up. Characters gain EXP towards various progression rewards, which include stat boosts, new skills, and passive abilities.
If you haven't read part 1 of this post, I'll summarize the balance issues I've been struggling with.
Being able to take on battles in any order led to poor balance
Skills and passives being unlocked at fixed levels made it hard to set new party member starting levels
Leveling up turned into noise - it happened after every battle and you didn't really care
With progression rewards, stat boosts no longer come every level. I can balance all encounters in a region around a specific "stat level" and know that whatever order the player picks the fights in, they won't be over leveled. By the time they've cleared the region, they'll have enough EXP to earn a stat boost that makes them strong enough for the next area.
Skills and passives are no longer tied to a specific level. Instead of earning a passive at level 10, it's now earn a passive as the third reward. With everything relative, character's don't have a starting level to cause a problem.
I'm loving the system so far. Rewards are unique per character. Some characters are defined by their passive abilities, so a new passive is their first reward. Others characters care about MP, so they'll work towards a big MP boost. I'm tempted to add items and gold as rewards, but I worry it makes no sense from a world-building perspective. Like, where did that extra gold come from?
i love it, but please dont add items or gold as rewards, its totaly unecessary, and allows people to efectivelly give one characters reward to another, wich gives people more incentive to just focus on a few characters and never use the others to defeat dificult enemies.