I'll copy my previous post on this:
Action Rpgs need to take a look at Action games when it comes to Gameplay and Form, and Rpgs when it comes to structure.
Progression should be based on changing what player can DO, instead of adding multiply/+x % bonuses to existing player actions...there is not a single (open world) rpg where this didn't ruin gameplay/difficulty.
And higher lvl abilities should require higher skill/execution from the player, so it's not just spam to win or making previous ones less relevant.
So if you have a skill Athletics, player would gradually improve his basic animations, learn how to dodge faster, different evasion and movement techniques, etc.
On the other hand, instead of higher level enemies simply having superinflated stats, developers should counteract player progression and create difficulty through variation in enemy AI( speed, aggression, morale and abilities), encounter design ( more varied enemy types, better synergies of enemy subclasses), environment obstacles, area parameters ( reinforcements, jammers, security, reconaissance, etc), etc.
The Other part of progression comes down to : Equipment
I think overall Souls games have the best rpg itemization in modern games, that solves most problems in a simple, elegant way.
You have:
1) Trash tier..this is simply while player is getting familar with the game, in very early stages.
2) Standard gear...all around average stats, easily upgradable/customizable with common, easy to find resources
3) High grade gear...above average stats, but far more limited customization, more specialized
4) Unique gear...when you kill a "boss", you can gain a completely one-of-a-kind weapon, that looks and plays completely differently, highest stats.
Only thing I would change is make last type, completely unmodifiable and instead of using crafting material to improve base stats, design weapon/armor mods ( like in Fallout IV).
This balances customization with traditional, most important DPS/Damage reduction stats, and opens up a ton of more options with character builds.