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Finally made it to Silver Rank. I completely forgot degenerating was locked behind story progression. Thankfully, it was not needed since it seems they can still get exp after hitting max level. After carrying Gulpin around for a while, it gained enough holy exp to evolve. The farm was also a lot more straightforward than I remembered, so Caterpie could evolve too.
Difficulty so far has been all over the place. Most random encounters are mindnumbingly easy and there is a ton of them but then the game loves jumpscaring you by throwing random Ultimates at you when you are not ready. Then most boss fights have been quite challenging since they hit like a truck and seem to have a lot of defense and resistances but the big boss fights are super easy since, despite having a ton of hp, they are super weak to attack that hit multiple spaces.