From Fallen Sword Wiki
Experience Points, more commonly referred to as XP or Exp, are a measure of the progress of your character and determine your rank within the game. In order to advance to the next level you must gain sufficient experience points. Each level has a set amount of XP that you will need to gain before advancing, with higher levels requiring more XP to advance. Your current number of experience points can be found on your character profile page and by hovering your mouse over the level progress icon near the top of the game screen.
The main way of gaining experience points is by killing creatures. As in real life, training for something easier than your abilities will gain you less experience. Therefore, killing creatures that are at a lower level than you will yield you less experience for each kill. For example, if you are level 10, then killing a level 10 creature may earn you 40 XP; however, if you kill a level 5 creature, you may only gain 10 XP. The amount of XP you gain for each kill can be increased by the Adept Learner and Librarian buffs (either cast by players or gained by using potions), as well as the Elite Hunter enhancement (gained by wearing most sets). You will also gain a small amount of experience by being part of a group that defeats a creature.
Another way of gaining experience is to complete quests. Not all quests have XP rewards but most do. Generally, higher level and more complicated quests have larger rewards. Note however that the XP gained per stamina used is often much lower for quests than it is for killing creatures and thus power levelers may skip quests unless they can be completed as part of their regular hunting.
Experience is also gained automatically every hour. Your experience gain per hour can be increased by purchasing an upgrade for 15 FSP, by wearing one of the items or sets that has a +XP gain bonus, or by being a member of a guild that controls a relic with a +XP gain bonus.
It is also possible to gain XP by purchasing a character upgrade for 2 FSP that will give you 1% of the XP needed to advance through your current level. However, this upgrade is considered by many to be a waste of FSP. It can be considered more "profitable" to spend the FSP to increase your current stamina and continue hunting, the 2 FSP will buy you 50 stamina, and the XP gained through hunting with that stamina will be more than 1% of a level.
Not only can experience be gained, it can also be lost. You will lose XP if you are defeated by a creature in combat. You can also lose XP if you are attacked and defeated by another player during PvP (XP is not lost due to combat in the PvP Arena). You can protect yourself from XP loss from creature defeat by using the Defiance buff or purchasing the "Protect XP" upgrade for 25 FSP (the latter will also protect you from XP loss due to PvP defeat); however, neither of these measures will protect you against XP loss due to defeat in PvP while being on the Bounty Board.
Like each character, each guild has experience points (Guild XP) which determines the guild's level and rank within the game. Guild experience is gained by the actions of its members. Each new guild member starts with zero XP contributed to the guild (regardless of their personal character XP). For each XP a member gains through killing creatures a small percentage is also added to the guild XP. The contributed guild XP of each member is listed next to the character name on the guild page and in the Guild Advisor. If a member leaves a guild the guild immediately loses the XP contributed to the guild by that player. However, each day 1% of the current guild XP is "locked" and the guild XP can not be subsequently reduced below that locked level (the maximum locked XP level is the current guild XP).