I posted this somewhere else, but it's relevant. It's only part of it so it may be a bit convoluted:
Well, I honestly don't know anything about UO, but I'll try to address your thoughts otherwise.
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Each level just gets harder and harder to gain. Rumor has it that most people would give up once they reach around the 300s or so. But some idiots would go well passed that.
The idea is somewhat like that; however, (and keeping in mind I don't know about UO) the intent is that you don't worry about capping skills, you just naturally become stronger as you go. In other words, there is little incentive to intentionally get out there and grind (at least, for the most part) because you can actually get grind-like results just from doing quests and the like. As for diminishing returns the higher you go, only to a small extent. Actually depending on your race you would have different growth rates for different stats.
But you have to keep in mind, I'm not talking about your bare bones stats like strength, magic, and speed. There would be hundreds, eventually thousands of abilities and stats, each becoming stronger through repeated use as well as training quests. You want to make an ice-based ranged user who's fast on his feet? If that's what you use, that's what you'll get.
Another aspect to deter people from grinding is that there is really no advantage to being stronger as far as personal growth goes, except that your chances of victory will naturally depend on your abilities. For example, let's say that you've been a dedicated player for a year, and you want to play with your friend who just picked up the game. If you take your friend to an area where you can solo, they'll get the same growth rates as they would in a newbie area, they'll just have a greater risk of dying. So if you want to party with someone, there's really no disadvantage to letting them tag along for either you or themselves (with few exceptions, like say they wanted to train as a tank but the enemies you fight will one-shot them-- it's for that reason you do grow slightly faster the lower you are)
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While you mention this Utopian core system to power an MMO do you have any idea at all how it would actually work?
That depends on to what extent you want to know if I know, because as far as programming goes, I dropped out of my first C++ class, so no, unfortunately I have no programming skills. I'm just an architect. As for how it would function, now that I can divulge. As I mentioned, the idea is not to cap the players' growth, but also not to set a cap that they can see but is just insanely difficult to reach-- more like, there is effectively no cap. If you were to repeat the same action over and over nonstop for two years let's say, then maybe the math would allow you to cap it. It would be so unrealistic to cap, no one would even try, but at the same time, you would still make observable progress. The trick here is that people won't be dwelling on that numerical stat that's recorded on their character anyway, because many of the better abilities will require actual skill to use optimally.
Ok, skipping ahead a bit. Let's say that you want to cast a water materialization spell to suffocate your opponent. Now, you'll have to hit your macro, or whatever the trigger for the spell will be, and now a small diagram will appear on your target, in the shape of a wave (just as an example). To execute the spell optimally, you need to trace the shape of the wave with your mouse. The spell will work even if you just draw a straight line, but to maximize your damage, you want to be as close as possible, and the better you do, the more growth you get. This is just one of many ways in which abilities would be made to depend on something other than your stats. Now do you really have time to worry about grinding out stats when your performance depends more importantly upon your execution? No, now you're not doing the same boring task over and over to improve your character, you're actually pushing YOURSELF to get better at something.
Of course, with a system like this, updating new content that grows in challenge with the playerbases' progress is paramount. Essentially, there will always be monsters and tasks in the game that are too hard for anyone to defeat. By the time they can overcome those obstacles, new ones are added that again the playerbase cannot defeat.
Heh, that was more than I wanted to share without getting paid for it, but at this point I'd just be satisfied if someone would make my vision a reality, even if no money were involved. Any questions or if you think you may have found a flaw in my design, I'm happy to address it.