Ragnarok Mobile applies a level gap penalty to your EXP and Drop rate depending on the difference between the monster’s level and your own.

A different penalty rate is applied to monsters above your base level and below base your level (listed below).

Level Penalty

Level GapEXP & Drop Rate
When monster level is higher
0 - 10100%
11 - 2080%
When character level is higher
1 - 10100%
11 - 1580%
16 - 2060%
21 - 2540%
26 - 3020%
Credit: Excrulon, Xenion, Shifon

As you can see, the level penalty is especially punishing when farming monsters below your level. This setup discourages higher level players from farming lower level monsters.

Which is part of the reason why we have seen lower level materials (that are in demand late game) go up in price as the player base progresses.

Ideally you would be farming monsters between a 10 level range (above and below). However there are times where monster killing efficiency will make up for the penalty applied.

This penalty does not apply to task based rewards eg. Time Rifts, Endless Tower, Valhalla Rift