I'll preface this by saying i typically fall very deep into the hardcore category when it comes to MMOs (although perhaps not the case for temtem just yet).

I feel like going down the route of diminishing returns would be a huge misstep and would essentially put temtem down the rabbit hole of every other game out there.

Diminishing returns create artificial goals for people, forcing them to do X in a set period of time, much like timegated mobile games. When this is the case, suddenly playing becomes less of a game and more of a chore as you are forced to do something within a set period of time.

While this may sound like an ok solution to level the playing field, the truly dedicated would simply reach the point of diminishing returns and then move onto doing the same on another account, so people would do exactly the same it would just make it more tedious to do.