Out blacksmith is skilled and it will never destroy your items while trying to upgrade them!

So he highly recommend upgrading them.

Depeding on the item rarity, more upgrade items are required. You can learn more about that on the rary system page.

He can also craft:

• Stones
• Affix related items
• Belts
• Time elixir (rune system)
• Dragon skull

 

 Other upgrade options

   Dragon scroll - offers 10% upgrade chance

   Magic stone - if the upgrade fails the item will not reduce its quality

  Ritual stone - offers 10% upgrade chance + if the upgrade fails the item will not reduce its quality

 These powerfull items can be fond at powerfull bosses in dugeons.

 

  Spirit stone scroll - returns a spirit stone from the item back in your inventory. Does not leave a shard behind.

You can find it and at elite mobs (the ones with a skull above).