Experience is used for leveling up your charecter. The amount of experience required to level up gradually becomes greater as you achieve higher levels.
Experience distribution upon defeating a monster will vary depending on the size of the group who killed it (only characters that are close enough to the monster will be taken into account; the hitpoints of the players of the group that are close enough to the monster will be represented in light green), on the level of the player who did the most damage (even though the level of the characters in the group also counts. For instance, if a level 5 grouped with a level 90 and killed a level 9 wolf alone, he would get his part of the experience, but the higher level will not get anything) and the number of stars of the enemy (that go from 1 to 6, representing the difficulty of the monster).
Experience distributed among groups is dependant on the player within the group that dealt the most damages on the monster and then cut into portions to be evenly distributed (apart from members of the group that are higher level then the monster). Travelling in groups will give the group a bit of bonus experience (5% per player), however this does not mean that players would recieve more expereience than if he was travelling alone, this is because although the kill will be worth more experience, the experience is split between the group evenly;
The formula of the experience gotten while being in a group is the following:
with X="XP of the member that dealt the most damage" and N="number of members in the group".
Note: This formula only works for members in the group that are less or as high level as the player that dealt the most damage.
When completing a quest, the player usually receives a certain amount of experience depending on his level. (we can take the example of the Fettlecaps mushroom quest that gives less experience as the player gains levels)
The main factor behind experience distribution would be an individual player's level. If a player defeats an enemy that is a certain amount of levels below and has a low star difficulty , that player may not recieve any XP at all for the kill. Similarly, if a player completes a quest with a low difficulty, the player may recieve poor, or no XP from the quest, however items gained upon completion are not effected by this.