Dear GGG: The Life and Defence overhaul for PoE2 is great! Now you should do one for Resistances!

The new ways maximum life works with the skill tree and strength was a great change IMO. The changes with block and evasion to apply to attacks and spells universally was also really good. A lot of pointless bloat was removed and now defences are a lot more intuitive. Overall the game is much easier to balance from the Devs' perspectives too since the baseline tankyness of a player is easier to approximate.

Now I recommend updating the way Resistance works so that it isn't so messy and I'll explain why and then how afterwards:

Currently resistances are reduced throughout the campaign to go into the negatives just like in PoE1 to offset the player naturally getting better gear and it ends up feeling like a tedious treadmill and checklist more than an actually form of stat progression.

Resistance modifiers also feel completely backwards in value. Since you end the campaign with -40% (if you did all the quests) and can reach a limit of 75% this means that the first 25% resistance makes you take about 18% less damage, meanwhile the last 25% resistance you have makes you take 50% less damage. Another point is if you have +100% fire res and +80% cold res from gear post mitigation you would take 40% fire dmg and 60% cold damage. It's really jarring that in this example a difference of only 20% (which is a single tier 6 mod on gear) results in the player taking 50% more damage comparatively.

Maximum resistance is even worse since above 75% res every point has steeply growing returns, but is somewhat balanced around this factor and therefor is very hard to get. Maximum resistance generally isn't even worth going out of your way to pursue unless you can stack a lot of it. This has similarities to the issue of normal resistance, but is far worse because anything that penetrates the players resistance can devastate a disproportionately large amount of a player's build investment.

Overall there is a lot of awkwardness and off-putting bloat from the way resistance currently works and if there is any time to ever overhaul it, it's during the PoE2 early access!

The entire way resistance is calculated should be changed:

Rather than the resistance mitigation multiplier having additive sources with growing returns it should instead be a simple formula that works in a reverse fashion. I recommend changing resistance to a basic formula with some simple examples such as (100/100+res = mitigation multiplier) or (50+(0.05*res)/50+res = mitigation multiplier). I also recommend resistances no longer be able to go below 0% and sources of resistance reduction be changed to cause the debuffed target to take more or increased damage instead. Overall this could potentially remove a lot of bloat and streamline the way forward for easier and cleaner balance design.

If resistances were formulated like the above suggestions then many things would change for what I believe would be the better:

The resistance cap could be completely removed since it would no longer be necessary as an awkward limiter.

The campaign resistance reduction could just be removed since player gear progression would no longer have a need for it.

Sources that increase maximum resistance could just be replaced with modifiers that give normal resistance or even a More resistance mod.

Sources that lower resistances like exposures or curses could be altered to instead make the enemies take More or Increased damage.

Penetration could be mechanically changed to also apply to all sources of Damage over Time to match the above change.

Sources of extra situational resistances such as Charms or Scepter Auras and the like could still be relevant past a certain threshold without becoming overpowered like how the Purity auras were in PoE1.

Missing a single resistance suffix on your gear wouldn't make you take more than double damage and would make swapping and upgrading gear less restricting.

Penetration would not instantly kill a tanky player, and would instead just be a simple enemy modifier.

It could take more investment to reach mitigation levels around 90% and so balancing hard content would be easier for Devs, similar to the outcome of Life changes from PoE1 to PoE2.

Stacking resistance on your gear past a certain point would actually do something and be a lot more satisfying then having the effect hard-capped by max res.

There are a lot potential benefits to changing how resistances work. While it wouldn't be a small change, it would not be the most complex overhaul and I think it could really help the game and the results would be appreciated by new and old players alike.

I'd like to also add that changing to a resistance formula would be good for both the new player experience AND campaign replay-ability over the course of multiple leagues. New players would not suffer as much during the learning period where there gear isn't as well balanced as it could be. Veteran players starting a new league would also find it far less of a chore to balance their leveling and filler gear as a result.

I added/edited a little bit about how penetration could be changed to match.