Pay-to-win often goes hand-in-hand with free-to-play. A P2W system is any system where the whole game is theoretically open to you, but real monies give you more XP, better weapons, more actions-per-day, stuff like that. If it's level caps for free players, that's practically the shareware model. Guess it works though...yeah that could work pretty well. But do you pay once to break the level cap, or do you have to subscribe? Also, what if your game has no levels?
Ehh, I'd be leery of "pay for a year of service", because A] players might feel like oh, I /bought/ this game and now they are taking it away...just because they have had it without consciously paying for a long time. And B] it's a huge risk for the company, because you get a lot of subscribers up front and then a year later, when they all come up for resubscription, you don't know if your resubscription rate is going to be 50% or 5%.
In a game like 0x10^c, the 'pay for expansions' model doesn't work because it's kind of an open world, right? I mean...where is the expansion even going to go?
Here's what Puzzle Pirates does, and it kinda works. In a very simplified nutshell: Anyone can serve on a ship, but only people who pay can own a ship, or captain a ship that their guild owns. They actually have two types of servers: one that divides it up by subscription (pay $x/month and get eveyrthing), and one that divides it up by microtransactions and special currency (pay $x for *10, pay *10 to get this subset of paid rights for a month, and you can trade your *s to other players for normal game currency).