Loot 2.0

"Loot 2.0" is a term used to describe the loot system for Diablo III that was introduced in a pre-Reaper of Souls patch.

Overview
Coupled with the removal of the Auction House, the system focuses on better loot drops, targeted loot drops, and giving players additional ways to customize their items. In a sense, it is replacing quantity with quality, with legendaries becoming rarer, but more effective. It involves the implementation of the Smart Drop System. In game, it both increases chances that a newly found item can be a potential upgrade and reduces the ability to gear multiple characters by playing just one of them.

Smart Loot
The Smart Drop System is a type of 'background program' that was introduced in Reaper of Souls. It takes note of a character's class, and sometimes provides items and affixes specifically fitted for that class (e.g. specifically providing a sword for a Barbarian, as opposed to a bow). Smart Loot does not affect all loot: 15% of items will be dropped with stats for a random class other than the current one.

When Smart Loot triggers, it will effectively prevent the item in question from rolling any stats that would be useless to the current character's class: i.e. wrong Elemental Damage type, wrong resource bonus, wrong skill bonus, wrong core stat etc. It does not take the current build in account, so the character does not get increased chances to roll bonuses for the skills they currently have. Also, contrary to popular belief, Smart Loot does not track the currently equipped or stashed items, and the chance of obtaining an item does not change if the player already has one (Legendary Gems are a notable exception to this rule).

Legendary and Set Items drop rates change depending on the character's class, increasing chances to obtain items and sets fit for their class, while bringing chances to get the legendaries and sets for other classes to very rare occasions. Items with Legendary affixes and set bonuses that only affect one class will also drop rarely, if ever, for classes that would not benefit from them. Example: a class other than Wizard will have greatly reduced chances to obtain Jang's Envelopment belt, and a class other than Witch Doctor will hardly ever see a drop of Swamp Land Waders. Moreover, a Crusader getting hands on these two items will get those with Intelligence as primary stat, even though they can (in theory) roll Strength or Dexterity.

Regardless of whether the Smart Loot kicks in or not, an item that is determined to be used by a specific class (including sets and class-specific items) will never roll stats that can be used only by any other class; that is, even if a somehow obtains a Quiver, it will always roll Demon Hunter-specific bonuses. However, non-class-specific item stats can be re-rolled manually through Enchanting or Kanai's Cube, provided the current class can (technically) use that item.