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The first few realm levels scale linearly. So at realm level 1, each enemy is on average 3 levels less than your creatures. At realm level 2, each enemy is on average 2 levels less than your creatures. The scaling increases with each realm, so eventually you’ll run into enemies that are 10 levels higher than your creatures.
At lower levels, you’ll find that this increase is substantial. If your creatures are level 10 and your enemies are level 20, you’re going to get destroyed. But if your creatures are level 100 and your enemies are level 110, there’s not as much of a difference and you have a pretty good chance at winning.
Aside from that, you’ll also be upgrading your artifacts and creating Nether Creatures (much more powerful versions of normal creatures) which will allow you to progress even further. You’ll also have access to a wider array of creatures which allows you to create better strategies to handle harder obstacles. And in the upcoming patch 2.0, each time you gain a level, you’ll be able to spend skill points to improve your team even further.
So unlike a lot of other games, progress isn’t measured directly by your level - it’s just a factor among several other things. You are certainly rewarded for leveling up, it’s just not in quite the same way as other games. Hopefully that answers your question!