Difficulty settings

Normal: all as it is now.

Easy: monsters and animals deal less damage; crafting requires less resources; bosses have a bit lower health and do attack less often.

Hard: monsters and animals deal way more damage than on normal; crafting requires more resources; bosses have twice health and do attack more often, and probably move more quickly.

Nightmare: Same as hard, but with the next rule: Player has a rune, this rune allows player to revive one time, the rune stays on the last place of player's death and Player can pick it up to return a chance for revive. If Player will die second time without the rune - game will over.

Or nightmare can be simply hard, but with one single life.