If they are going to be a race that is useful to a magical player, than they need something more.  The trait you can choose to add to units to give +3 mana on a kill, isn't enough to me at all.  If all Wraith automatically got that, than that would be a start.  Also, I think even though they are weak with the -1hp, they should be tougher to kill with magic, that is why I wanted to add resistances.  But they need something. 

That's an interesting idea, but I think it would be something the player could exploit and make the AI weak.  And it might make the Wraith Sov Superman.

I think it should be -1 hit point *regeneration* not per level and not max HP (units behave like sov with low healing rate). Or a flat -10% HP with a better bonus to compensate for the penalty.

From a roleplaying and lore perspective they should be frail and weak without magic, but with something magical to compensate for standard members of the race (champions have gear and enchantments). If the -1hp per level remains perhaps have a trait to give them some really fun magic armour as a unit trait unlocked down the magic path:

Wraith bone - +2 defence, first 1 point of damage is done to mana instead of health. Allows ability that burns mana to absorb damage. Critical hits ignore this shield (either that or they really use up your mana, whichever seems better, I like criticals hitting the corporeal bits of them)

Oooh... A reverse infection spell. Spreads buffs between friendly targets with wraithblood, so your sov could boost an army.

already have a slave using faction, overlap wouldn't be too good imo

Throwing some ideas out there for what the wraith blood could be.  Pick a positive and then maybe a negative to balance out.

positive:

+init when casting a spell or using a ranged staff

+adds a member to unit after a kill if trained unit, hero instead heals per level

+resistance to damage types (i think cold resist and maybe cutting/pierce could fit the lore)

drain life on hit, either % of damage or a fixed amount per kill

+a stat based on death shard owned

+cold damage per hit

negatives:

- 1 health per level (i think this is reasonable to keep but not with the current +3 heal)

-% to total health

unit does not heal but must use life drain instead (pretty drastic but flavorful and maybe balanced with strong life drain trait)

vulnerable to damage (possibly fire or blunt weapons)

anyways, i agree that the current implementation could use some tweaking and also the unique traits on level up that gives another hp loss per level should be changed.  a strong unique trait on level up could actually justify having a weaker starting blood trait, but as it is now they both are sub par.

Franknfurter's suggestion is good, and it makes choosing between taking spiders/demons or trained units difficult. Mass stone skin, mass haste, mass focus(?) would be very powerful. Specially if you had secondary characters doing buffing or throwing boost spells.

What if the mana and heal traits swapped around? Since the mana trait seems to be much preferred. -1 HP/level -> -10-20(%?) Carry weight? They don't wear armour in the default faction so this is no real issue, not sure how it would play with custom faction.

Oh yeah, Austinvn, I was only providing an example of how Wraith blood could be worked around, or in what ways it could be 'good' if it was better balanced. If Wraith units were like super tank vampires from HOMM they would be awesome.

My thoughts, bit long but I wanted to group things together, to start with:

We all agree that -1hp/level is harsh, but that a physical frailty is fun and makes sense. Keep it or something similar. Sadly it penalises your sov significantly (they gain lots of levels) and trained troops just aren't used and have nothing to make them competitive with your free spawn. A vulnerability to blunt/cutting of 25% would be even more thematic in that wraiths shouldn't be easier to kill magically but more frail physically for example life-draining shouldn't be easier against a magical race.

But whatever the penalty it needs more to balance it. Something that adds to the magical feel of the faction and works well with the other traits. The positive should scale well (be it per level, per shard, per kill or be so useful that it always makes a difference).

Wraiths

-1hp/level is harsh, Significant penalty to high level troops, mostly felt by your sov.
+3 health on kill is insignificant to trained units and champions, doesn't scale, but is thematic.

Comparing "on-kill" bonuses:

+1 permanent health on kill, anything permanent is open to abuse, a cap of 2xlevel could work.
+3 temporary health on kill, again open to abuse but less so, more useful for sov survivability
+1 figure in unit on kill, useful only to trained units, death shards already have 'zombies'
+temporary buff on kill, depends on the nature of the buff*, benefits all, but more complicated
+x mana** on kill, good early, weak late on. Doesn't really help make troops better.
+steal enchantment, not really useful, unless it was on-hit rather than on-kill
Lifesteal, on-hit rather than on-kill would be more useful for all troops

* Buffs would make more sense if they were aggressive and if they scaled with either shards or the strength of the unit killed. Some examples:
Harvested energies
+attack for next strike based on shards owned. Poison for death, cold for water, lightning for air, fire for fire. Or.
+25% unit attack stolen for one attack. Or.
+targets level not in attack (which could be overpowered) but in temporary initiative (gives an immediate extra turn)/accuracy/spell mastery/or spell cost reduction (useful mostly for sov.)

**Perhaps if mana gain scaled to match target unit level or number of figures, whichever is higher. Although I like it I think perhaps not for every unit, perhaps it should just be that the trait with -1hp/level adds mana based on something that scales instead (enemy level/figures/attacking units level) allowing them to be used to farm mana.

Traits for Trained mages
Race traits should help to encourage a playstyle. Mana gain does encourage spellcasting but you don't need any trained units to benefit from it. Same with a tactical spell cost reduction. For trained units mages make sense for Resolin, melee troops really don't, archers are only semi-useful (less likely to research required warfare techs). To boost mages therefore:

+1 crystal/turn, very simple but effective way to encourage the use of magic staffs.
Crystal cost reduction for equipment (scales into late game, less useful early on)
+x to ranged dodge, say 25%***, better for troops on the rear of the battle. Useless on front lines.
Added damage or additional use for staffs somehow, examples include:

Corrosive runes, applied as equipment or traits that adds poison to all attacks/only ranged attacks
Other Debuffing Runes (slow, poison, wither, curse...etc).
As equipment it could be useful for a sov to have at least one rune (A visual effect from it would be nice too, a glowing rune on the cheek or superimposed over the weapon)

*** Per level could easily become overpowered so a set bonus is preferred (like the ethereal trait in dominions 3 that gives 75% dodge to all non-magic attacks but units with it normally have 0 protection).

Racial spell
Lastly I mentioned before a Reverse infection spell... a racial spell that triggers at the start of battle and has a chance each turn for friendly buffs to spread to the unit. Would encourage you to hold back a few turns blasting the enemy with spells rather than rushing into melee and gives them a fun mechanic that relies on magic strength.

My Personal preference, enjoying the fun of pick'n'mix:

Penalties:
-10% base HP, -10 carry capacity,  -25% cutting resistance, -25% blunt resistance, +25% piercing resistance, +25% ranged dodge
Bonuses:
+1 crystal per turn
Unlocks "Dark Runes" equipment with research from sorcery.
Start battle with spell "Leeching presence" autocast on wraith units, a chance per turn to copy adjacent units buffs. (not just allies, some use for melee troops)

new Faction trait (for anyone-> Amarian or Resolyn)

Crystallographer: can build in any Conclave (or town?) +1 crystal per turn.

Possibly requiring first tech that unlocks crystal using gear?

----> might even be worth it as just a buff to the 'Adepts' Faction trait (ability to build a Crystals lab)

I think that it's all about the synergies.

The wraith race provides useful advantages for the resoln faction, and that should be sufficient justification for their existence.  And, if you do not like them, you can always build your own race.

But their +hp/kill is a starting bonus.

For mid/late game: If you are converting all of your shards to death shards and building altars (and, later, temples) only strong units will be able to do any damage to you in any city with a blood sigil.  And, for the rest?  If you are not prepared to defend them, you can sacrifice them for mana.  (Of course the tradeoffs are not that simple, but this gives you the general idea...)

In other words, I am dubious about the idea that the wraith faction should be re-tailored to make them playable in a faction which is not designed with resoln style strengths.

Edit: but do not go out to play resoln until 1.03 comes out, almost nobody has been playing them and 1.03 fixes some serious bugs with them.

I played Wraith blood faction several times, default Resoln Empire at first, custom made empire later.  

Only real benefit gained from Wraith blood is Hallowed Rite perk! Along with archery faction trait my archers I had abundance of mana once I reached the technology to make bows.

As a Wraith, you are completely useless in close combat and Cult of Hundred Eyes or Beastmaster leader is a must, your own Wraith blood CC-troops are expected to die after a first charge thanks to HP penally. 

Wraith blood additionally gives +3 hp life drain per kill, but you hardly notice during endgame as most of your troops (except archers, obviously) are not expected to live long enough to have any benefit from it.

BGW Trogs suffer from -1hp penally per level I guess, Amarians too (or how they are called)

Maybe Wraith's should get a strength penalty instead of the HP penalty, 20% vuln to non-magical attacks, 20% resist to magic, 20% reduction in elemental damage?