In the fantasy game originally played by Arneson, it was primarily through the recovery, and appropriate expenditure, of long-lost treasure hoards, that characters advanced in levels. Appropriate expenditure is a critical component for all classes, as it is only through the expenditure of gold (and the Wizard's case, both expenditure of gold for the spell-making materials, and time, in creating his spells) in ways meaningful to the character's motivations and interests that the characters can advance.
If you have not taken note yet, let me draw something striking about this experience points system to your attention now. No experience points for monsters killed in D @ D.
I think that this approach has some advantages. One, is that it militates against the recovered treasure being used to shop for the newest and coolest magic item. To expend gold in this manner is to reduce the rate of character advancement. Two, it gives character's goals outside of their adventuring life and makes the creation of a game world a necessary part of character development. Finally, it allows the monsters to remain scary and difficult to fight (as a major goal is to avoid combat, especially if it is mostly risk with little reward).
In more recent edition of dungeons and dragons, advancement is based on either defeating opponents or advancing the plot. However, plot advancement can reduce the options that players have and make them feel less in control of the direction of the game. On the other had, defeating monsters means that the monsters have to be relatively weak in every single combat. After all, with between 10 and 30 encounters per level, a high level character needs to be the victor of hundreds of combats. Not even the great duellists of history tended to manage that!
There is another (subtle) advantage to this approach -- high-level characters will tend to be accomplished in the world. High level wizards will run laboratories and teach apprentices because that is how they generate experience. High level clerics will have supported and developed churches. Even high level fighters will have connection to the world (perhaps as petty nobility) through their investment of their adventuring loot.
It's an interesting system . . .
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