It'd be nice if all the greydwarf mobs and trolls you're killing in Valheim occasionally dropped something a bit more interesting than resin and shaggy blue leather. A modder is working on making that happen with the Epic Loot mod, created by randyknapp (and currently in early development) which adds magic items with new powers than can be found randomly in drops and chests.
And that's a really fun idea, bringing Diablo-style tiered loot into the Viking survival game. Don't get me wrong, I love my wolf armor and my max-level stagbreaker, but those items aren't unique. I can replace them with identical copies if need be, it'd just take more resource gathering. I really like the idea of coming across a special magic weapon or piece of gear that I can really feel attached to, that would be absolutely heartbreaking to lose by, say, sailing off the edge of the map. It gives Valheim more in the way of stakes, and makes your arsenal feel unique.
The mod introduces loot with four different tiers: magic, rare, epic, and legendary. There are some interesting effects to find in these magic items, too. Just looking at the list of magic armor you might come across, there are enchantments for luck (for better drop rates), waterproof (to keep the dreaded "Wet" effect from sapping your regeneration), double jump, waterwalk, feather fall, quick learner (a helm that increases your XP gain), and tons more planned for the mod.
And there's even a new crafting station that will let you enchant the weapons you craft, based on runes that can be harvested by killing bosses and using the forge to melt down their heads. Grisly, yes, but might as well put those extra trophies to good use. A special enchanting skill is also planned to lend your magic items additional power.
You can even install the Epic Loot on a dedicated server so it'll work in co-op play. Check out the mod at Nexus Mods, but keep in mind it's not finished yet so many of the features aren't available. Also note that Epic Loot is dependent on a few other mods, such as Extended Item Data Framework and BepInExPack Valheim.