Well, whatever road we decide to go on, I hope it has levels...
The attribute version is nice. Will be hard to balance and get right.
Attack - each point increases base attack damage by +2
Attack Speed - each point increases base attack speed by 0.25%
Movement Speed - each point increases movespeed by 0.02
Armour - each point increases your armour by 1 point.
Ability Power - each point increases ability damage by 5, 3, or 1. (single target, damage over time, or AoE)
Life - each point increases your base hitpoints by 15
Energy - each point increases your base energy by 8
Shields - (where applicable) each point increases your base shields by 10
Singularly, these are minuscule increments. So, maybe each level you should get 10 points to 'upgrade' your hero. Bonus points when you get Double, Triple, Multi-Kill etc.
The alternative is the skill-point level up system. Which is mentioned above in detail..
I think both systems work well on the Timed Level Up feature.
The bottom level of my argument here is, that while it will be complicated to balance and implement either one of these features... I think an Arena type map without this basic RPG/AoS feature is going to look a bit 'empty'.
As a game goes on, we want it to progress. We don't want each arena battle to simply be the same abilities, strategies and techniques used on a different terrain.
None.