What is the benefit of leveling up in Clash of Clans?

The only benefit to levelling up is to unlock decorations.

From the "Experience" page on the wiki:

Experience and level mean very little in Clash of Clans. A common mistake new players often make is thinking that level has a factor in matchmaking or loot, it does not. Trophies are the sole factor in matchmaking, and Town Hall level is the major determining factor for available loot. The only thing level affects with regard to gameplay is Decorations.

Decorations have a minimum level requirement as described in the table below:

A better level shows that you are an experienced player and the XP level gives an precursor to if you are rushed or not when compared with town hall level. For example if you have high xp level on lower town hall, you are considered good player while the reverse is considered bad.