Enhancing and Transforming
You can get good weapons and equipment by completing episode quests, event fragments, and defeating powerful enemies guarding sealed chests. You can further improve these items by Enhancing them. Enhancing increases the stats of the weapon/equipment while also giving it additional effects and parameter boosts to the character equipping it. Transforming in the other hand is literally upgrading the weapon/ equipment to an entirely new and more powerful version. Not all weapons/ equipment can be transformed.
Blacksmiths
You'll come across blacksmiths in different locations. They play a significant role in the game since they're the only ones that capable of improving your equipment and even transforming them to new, powerful ones. The stats and parameters that can be added to the enhanced weapon/equipment will depend on the blacksmith doing the job. The success rate will also depend on their individual parameters.
Blacksmith Skill Levels
Each blacksmith has their own specialty, depending on their Craftsman Skill. Some like Goh in Market Street is proficient in Transformations while blacksmiths like Walker in Lake Steschal are more competent in enhancements. Help them improve and level up by consistently availing their services.
Blacksmith Skill List