Bosses & Rare Items
Incubate bosses from COMMON to DIVINE, and farm the 20+ rare items they drop.
Bosses
Bosses are unlocked primarily through the incubation system. As soon as you acquire 2,000 rubies you should rush to unlock /incubator and start incubating your first boss.
Bosses come in boss eggs, with a bunch of different tiers offering bosses from COMMON all the way to DIVINE. Incubation time can be sped up using Ethereal Infusion, which takes time off while you mine.
Bosses are killed by breaking any block, and also by the Smite enchantment. Their health pools vary massively, from 1 million all the way to 1 billion.

Which bosses to fight early
When you are early game, focus on mostly Giants and Fierce Dragons.
If you get lucky enough to pull a mythical boss, avoid fighting it until you unlock the Smite enchantment. Selling it to another player is the other option, and it is a real way to boost your progression.
If you start a boss with too much HP, /retrieveboss pulls it back. A retrieved boss returns at full HP.
Rare items
Bosses are the number one way players acquire rare items.
At this time there are over 20 of them. They are super rare drops from bosses that all offer different unique benefits, and they are the primary progression system late-game players are grinding for. New ones are added every map.

You can see the full list using /rareitems in-game and read about what each one does in its lore.