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I leveled up to level 5 but my character's stats like atk, def and res won't increase. Am I doing something wrong?

(+2)

From what I gather, that’s intentional.

That leveling up only raises your HP and WP.

If I read correctly, the other stats will go up (or maybe even go down) during story events.

(+1)

At least grinding the hp and wp stats will be quite useful in some way

In case you want to mess around a bit in combat