Is the engram reward power-level determined upon receiving, or decrypting

I am going to answer this from personal experience from leveling up 6 characters, it is possible there is something I'm overlooking or that theoretically there is a faster way if you maximize time.

The fastest way I've found is to first finish the story. Each story mission gives you a lot of experience. You don't even have to kill all enemies unless it specifically tells you to, you can avoid them and just get to the end. But this will mean you might have to do some adventures or public events to level up enough to access the next story mission.

Once you beat the story and get to level 20 your next mission is to get to raising your power level. "Powerful gear" AKA Luminous engrams are your main goal, these will give you legendary (and sometimes exotic) gear at a power level higher than your current max. You can get a number of them each week by completing milestones. An easy one to get is by joining an active clan and once members of the clan complete weekly milestones (even without you being there or online) they will unlock and give you the rewards. There's also exotic quests which lead you to guaranteed higher level gear and unique exotics that you can only get through the quests.

After climbing high enough you'll be able to play end game activities such as Nightfalls or Raids. Completing these weekly will not only give you more luminous engrams but these kinds of actives also have a higher chance at giving you exotics. Rise and repeat each week getting as many luminous engrams as possible and with enough time (and luck) you'll be at max power level soon.

Power level can be quite confusing and when broken down doesn't get much simpler but it all mostly comes down to damage dealt and damage taken but also what you have access to doing.

First, the simplest thing power level does is cuts off access to higher level activities. These could be story missions, heroic missions/strikes/adventures, nightfalls, raids, and now iron banner and trials of the nine.

Second is damage, from this video that explains it great detail, when you are the same level as an enemy you are doing what is called "base damage". 1 power level above or below the enemy won't make much difference at all but it does being to scale more and more as you get higher/lower than the enemies. At 50 power levels above the enemy you are taking 40.9% less damage, at 49 power levels below the enemy you take 150.6% more damage and dealing 43.12% less damage. And at 50 power levels below you deal nothing and are instant killed by everything.

Now there is one other scenario, the damage you deal when above the enemy power level. This is slightly different, where before your overall power level affected what happened, damage dealing when higher is only changed by the power level of the actual weapon. Basically, if you're in a 500 power level activity, and have a weapon that's 600 then it won't matter what all your other gear is as long as you are above 500. That 600 level weapon will always do the same damage when above the enemy power level. The difference comes from if you have the EXACT SAME weapon but only a lower level on it, only then will THAT weapon's damage change.

Put simply,

• Damage dealt when higher level is based on the weapon not the character
• Damage dealt when lower scales down until 50 levels below and then it's 0%
• Damage taken when higher scales until you take 40.9% less damage
• Damage taken when lower scales quickly until 50 levels below and you are instant killed

So while you could be hundreds of levels above an enemy you aren't going to be unstoppable and kill everything with a single bullet, you'll have an advantage but there's a limit. Conversely, being hundreds of levels below will get you smacked down by the first enemy that sees you, if you're even allowed to get near that activity.