This is a good idea, I think it might be easier for a leveling system built mainly on successful hits, or if it was for mining or farming, it’d be based on the number of blocks tilled or destroyed (farming should also give EXP. for crops grown by the player and harvested). Different levels could have certain skills that are unlocked once you reach that level.
I believe the Indie game “Total Miner: Forge” has something quite like this.
