What level of trade off are we willing to accept? I think racial differences are important and should be both meaningful and impactful. What is the point otherwise?
That's the right question to ask, because some tradeoff is absolutely necessary. If racial differences aren't meaningful, they're just flavor text. The tension is deciding where the impact lives and how permanent it should be. The mistake a lot of old systems made wasn't having strong racial identity. It was front-loading irreversible power at character creation in a way that permanently brackets viability. That turns "meaningful" into "solved," and once it's solved, it stops being expressive and just becomes homework.
The tradeoff also needs to be situational, not universal. If a racial bonus is always correct in every context, then it's not a choice it's a rule. Impactful differences should shine in some environments and fade in others. That preserves identity without creating a permanent tier list that everyone internalizes by level 5. Permanence matters too. Long-term commitment is good, lifelong punishment is not. It's fine if races lock you into certain tendencies, but the system should allow mastery, compensation, or specialization over time. Otherwise you're not choosing a race, you're just choosing whether you want to be optimal or stubborn.
Modularity helps because it decouples identity from optimization pressure, which is exactly what makes the tradeoff tolerable instead of coercive. Right now,
fixed racial packages bundle together three different things whether you want them or not: Visual/narrative identity, mechanical identity, and optimization leverage. When those are hard-locked, the strongest mechanical lever wins every time, and the "choice" collapses into a solved problem. That's how you end up with four viable races and a graveyard of lore.
Modularity breaks that bundle. Instead of "Ogre = this entire stat block," you get a limited budget of racial power that you allocate into traits. The tradeoff still exists, but it's explicit and local, not global and permanent.
Here’s why that matters for the tradeoff you asked about:
First, it lets the game cap optimization without deleting differentiation. If everyone has, say, the same total racial power budget, the ceiling is controlled. You're no longer stacking Ogre + Warrior + Meta and getting a 25% advantage everywhere. You're choosing where you want your advantage to live, and accepting weakness elsewhere. That naturally keeps the difference in the 5-10% band instead of runaway gaps.
Second, it shifts racial impact from throughput to profile. Instead of "this race is better at damage, period," modular traits can create situational strengths: vision, sustain, resistances, travel, recovery, utility, information. Those matter, but they don't dominate every encounter. Two characters can be equally viable while being better in different contexts.
Third, it turns "wrong race" into "different build," not "mistake." With fixed racials, picking the wrong race is a permanent tax you pay forever. With modularity, it's just a different allocation. You didn't choose poorly, you chose a different set of tradeoffs. That's psychologically huge, and it keeps people from feeling punished for aesthetic or RP choices.
Fourth, it prevents meta collapse without forcing diversity. The fear that "everyone will pick the same race" assumes the race is the optimization vector. With modularity, the optimization vector becomes trait combinations, not character models. You'll still see metas, but they'll be distributed across races because the power isn't locked to the silhouette.
Fifth, it gives designers a tuning knob instead of a sledgehammer. If one racial trait is too strong, you nerf that trait, not an entire race. If one combination is dominating, you adjust costs or interactions. Fixed racials force devs into brutal reworks that feel like identity theft. Modularity lets them fine-tune.
Modularity makes the tradeoff visible, intentional, and bounded. You're not accepting an invisible lifelong penalty because you liked how your character looked. You're making a conscious exchange: "I want X strength, so I give up Y." That keeps racial identity meaningful without turning it into a spreadsheet-enforced caste system.