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Life Level is one of the three core stats Link can improve by using Experience Points to level up in The Adventure of Link. Life Level is a direct boost to Link's damage resistance - on levelling up the life level, Link loses fewer HP from each enemy hit, with each Heart Container representing 16 points, to a maximum of 128 points.
By gaining experience through defeating enemies or finding Point Bags Link is able to upgrade his three principle stat levels: Attack, Magic, and Life. Upon reaching specific experience thresholds (represented by the NEXT number in the upper right corner of the screen), Link is given the option to "buy" an upgrade where a stat's level is raised by one and that quantity of experience is deducted from the total earned. Each stat can be upgraded to a maximum level of eight. Once a skill has reached the maximum level, its next level up becomes 9000 experience and selecting that upgrade will give Link one extra life.
Link is not required to upgrade in any specific order and can pass up an opportunity to raise a stat until later by selecting CANCEL. At that point, the experience required to level up is raised to the next threshold. If Link loses all of his lives and the game ends, all earned upgrades are kept, but his current experience is reset to zero.
1 Increasing Life Level past level 8 results in Link being awarded an extra life instead of a stat increase.