There are many ways you can upgrade your gear on Zoltyum.
Upgrading an equipment or a weapon, means that it will give the item stackable additional bonuses to make your character as strong as it can be.
Armor (arm) is the main source of damage reduction. Every 1 armor your character has, means that you’ll reduce your damage taken in 10 hitpoints.
So the higher your armor is, the less damage you’ll receive from monsters, this is why it is so important to upgrade your gear constantly and get better equipment to aid you in combat.
Since it is a lot of information, this is will be separated in topics to help you out on whatever you are looking for.
Upgrade Crystals are the main source of item upgrading.
You can check all information related to upgrade crystals and transfering bonuses here.
Mystic Forge is a crafting feature with the purpose of promoting an item rank to boost your character's power and resistance.
You can check all information related to the mystic forge here.
Exaltation Forge adds a Tier to your item, the higher the Tier is, the stronger the item will be.
You can check all information related to the exaltation forge here
While farming bosses you can sometimes loot their boss fragment, which you can imbue on your gear making it stronger and creating a semi-build based on the fragments you choose.
You can check all information related to boss fragments here