In my opinion, setting a maximum character level would be a better solution than allowing players to level up infinitely. The game should have a clear progression goal for players to work towards, and reaching the maximum level should feel rewarding.
Instead of constantly increasing levels, I think it would be better to introduce more ways to develop characters and add new content. With an unlimited leveling system, the entire process could eventually become repetitive: constantly farming experience, reaching another level, and replacing your gear with better equipment because your previous gear is no longer good enough for your new level. As a result, instead of genuinely developing our characters, we would just keep chasing the next level and repeating the same process over and over again.
There could be more ways to improve our characters, such as an expanded equipment upgrade system, additional upgrade tiers for items, the ability to add new bonuses to gear, unlock extra effects, or obtain unique items from more challenging dungeons and bosses. Other progression systems could also be introduced, allowing players to continue making their characters stronger even after reaching the maximum level. This would give players more goals to work towards and allow acquired equipment to remain valuable for longer.
In my opinion, it would be better to establish a maximum level and increase the level cap approximately every six months, alongside a major update introducing new content. This could include new areas, quests, dungeons, bosses, items, and additional ways to upgrade characters. This way, players would have a clear goal to work towards, and every major update would bring something new to the game instead of simply raising the level cap and forcing everyone to replace their entire gear set.
The most important thing to me is that character progression should be about gradually improving your character in different ways, rather than simply gaining more levels. I would much rather have a fixed maximum level with various options for further progression than an unlimited leveling system that essentially boils down to endless grinding and constantly replacing equipment. This approach could make the game more diverse, more enjoyable in the long run, and give players a greater sense of achievement for the progress they make.