Basic Game Mechanics Explantion

ATTACK/DAMAGE SECTION
ATTACK
Attack = ((Base Attack + Flat Attack) * (Attack %)) + Attack from Conversions
Explanation: Attack is a combination of your base attack and any additional attack(Flat Attack) from either weapons, weapon potentials, hero potential, costumes, jewelry and etc. This portion of your attack is further multiplied by your total Attack % from your masteries and gear. Attack from conversions is the portion of Attack that you will get from potentials such as %HP to Attack and %MP to Attack. This part of your attack will not benefit from Attack % multiplier and that is why Damage % is slightly more superior. Potentials such as %HP to Attack are always calculated with the max amount excluding conversion additives. So if you have 80,000 HP and 10% worth of HP to attack, you'll get 8000 Attack from the conversion.
*Note: That conversions don't work with buffs such as pathfinder and eldrika's flat HP. However these flat HP you get from these sets will be multiplied by your %HP multipliers.

SKILL DAMAGE
Skill damage = Attack * Skill Multiplier
Explanation: Extremely straight forward. The amount of damage you do with your skill is your total attack multiplied by your skill's multiplier.

OTHER MULTIPLIERS
Final unmitigated damage = Skill Damage * Damage % * Minion Damage % * Direction Strategy(1.15x) * Advantage Strategy(1.3x if you have it)
Explanation: These other multipliers are actually extremely powerful. Each multiplier multiplies your damage even further on-top of the previous. I assume Boss Damage % and Nep Damage % are also their own separate multipliers. So keep stacking these multipliers and your damage will be off the charts. ATM Damage % is a lot more beneficial than having Attack % only because Damage % effects the proportion of attack that is converted from HP/MP whereas Attack % does not. You can also get Damage % in higher quantities than Attack %. Although you can get Attack % on tier 5 jewelry which does help. Even so, both stats should be prioritized on weapons since they will give you the highest possible multipliers in the game. Terrain strategy also increases your damage by 1.15x times. I strongly urge everyone to make use of this battle tactic.

CRITICAL DAMAGE
Crit Damage = Final unmitigated damage * (Base Critical damage + Critical Damage %)
Explanation: Crit damage is a multiplier on your damage after everything has been calculated. The base critical damage in this game is 30%. You will hit for 1.3 times your normal damage when you deal a critical hit. Any % Crit damage you have on your gear is additive meaning that if you had a combined 20% Crit damage on your gear, it'll be added to that 30% base to total 50% crit damage, which equates to a 1.5x multiplier. Crit damage is EXTREMELY powerful, but it scales depending on your critical rate. Higher the critical rate the more valuable the critical damage mod will be. For instance if you have 100% crit rate, 16% crit damage will be equivalent to 16% attack or damage for instance.

DEFENSE REDUCTION
Pretty straight forward, if the mob has 50% reduction then your damage is multiplied by .5x. No need for a write up here~. I'm not going to bother graphing out the defense stat in order to find the underlying formula for growth. Sorry!

FLAT DAMAGE
Explanation: Flat damage will be added on after all these calculations. This damage is pure and unmitigated by defense. It appears to be effected by %Damage (unconfirmed).

MASTERY
Explanation: From what I've heard, 80% mastery means your hits will do anywhere between 80% to 100% of your full damage. At 100% mastery your hits will always hit for 100% of your damage.

ATTACK LEGEND

Name Details
Base Attack Your hero's base attack.
Flat Attack Any attack you have on your weapons/potentials/costumes and etc.
Attack % Attack % you get from weapon potentials or lord mastery. Shows up like "2.7% Attack" on weapons.
Attack from Conversions Things like "%Hp to attack" and "%MP to attack". These are all flat values that aren't affected by % attack. But they're affected by every other multiplier in the game.
Skill Multiplier The multiplier on your skill.
Damage % Damage % you get from weapon potentials. Shows up like "2.7% Damage" on weapons.
Direction Strategy Direction strategy involves attacking enemies from either the sides, rear or rear diagonals. It will give you a damage boost of 15%.
Minion damage % Strictly from jewelry. Will give you more damage against minion type monsters.
Advantage Multiplier You will deal 30% more damage if you have a type advantage. Rock beats scissors, scissors beats paper and paper beats rock.
Base Critical Damage Base critical damage is 30%. So if you land a critical hit, it'll do 1.3 times damage.
Critical Damage % This potential appears on weapons and jewelry. It's an additive stat so if you have 10% critical damage on gear it'll be added on top of the 30% base, totaling 40%.


DEFENSIVE SECTION
HP
HP = (Base HP + Flat HP) * % HP

DEFENSE
Defense = (Base defense + Flat Defense) * % Defense
Link: DEFENSE % VS DEFENSE RATING GRAPH

ITEM POTENTIALS SECTION

Increased Crit Rate by X% of Defense
Converted Critical rate = Total defense as a percentage * X%
Explanation: Crit rate from conversion will be unaffected by Crit Rate % multiplier. If you have 50% defense and you have a combined 10% conversion rate, you will end up with an additional 5% Critical Rate. The growth of defense gets hampered as you keep stacking on more and more. You can expect to get about the same amount of conversion from say 9000 defense and 6000 defense since the difference between these defense ratings as a percentage is very minimal.

Increase Hit rate by X% of Crit rate
Converted Hit rate = (Crit Rate - Crit rate from other conversions) * X%
Explanation: The amount of hit rate converted is calculated by the taking Crit rate and excluding crit rate that is obtain from other conversion and multiplying that number by the conversion rate.

POTENTIAL TIER SECTION
Note: This is very arbitrary and depends heavily on your character so please try to work things around your character and not follow what I say blindly. For instance jack needs hit rate because he can't do anything. An evasion Carrot needs %HP and -% Damage taken to even survive against some of the crazy damage in the arena. And yes I don't care for counter mechanics at all.
PVP WEAPONS
Heavy/Semi Critical:
+% Damage (Comes in bigger quantities than attack and does a bit more overall)
+% Attack (Also tier 1 mod, optimally you want both % damage and % attack on your gear)
+% Critical damage (Depends on your critical rate. Will be worse than other mods if critical rate is low)
+% Critical rate
+% Hit rate
+X Critical rate (Most of the time will be worse than %CR)
+X Hit rate / +X Attack (Depends on what your character needs)
+X Damage
Note: Hit rate might be more valuable for you if your character is having a hard time against evasion builds.

Hit rate build:
+% Damage
+% Attack
+% Hit rate
+X Hit rate / +X Attack (Depends on what your character needs)
+% Critical damage / +% Critical rate / +X Critical rate (Crits are terrible if you're only stacking hit rate)
+X Damage

PVP ARMOR
Defense build:
+%HP
+% Defense
-% Damage Taken
+% Regen (Regen is okay if you have an abundance of it on a character that can survive 2+ turns in PVP. If you have Eldrika's then this is definitely a mod that you'll want to roll for)
+X Defense
+HP (May be better than flat defense but having a lot of defense helps against armor reducing attack)
+X Dodge, +% Dodge (You'll get a decent amount of dodge if your character has % Defense to Dodge potentials, you can stack a little more on top of it by wearing maybe one or two boots, whatever floats your boat)
+X Regen / -X Damage taken

Dodge build:
+% HP
+% Dodge
-% Damage Taken
+X Defense
+% Regen / +% Defense (+% Defense may be better than flat defense. It depends on how much you actually get from the mods with respect to your character)
+X Dodge
+X Regen / -X Damage taken
Note: Again extremely arbitrary. You want huge hp pool for scaling attack. You want +% Dodge to scale your dodge. Honestly, going half-assed with dodge will not work out for you in pvp. You have to go deep to even have it do anything since it's pretty bad strategy in the first place. -% damage taken and flat defense will be pretty stellar for your character. Defense also scales better if you are in the low ranges. You'll benefit from great amount of damage reduction by just having bits and pieces defense here and there. Also, +X Dodge is great to help you further increase that evasion rate. It's also possible that +% Defense will be better for your character than X amount of flat defense, but that's up to you to work out. The rest are meh and depends on what you need.

PVP JEWELRY
+Attack by %HP
+% Attack (5* exclusive)
+% Defense (Great mod depending on your character / 5* exclusive)
-% Damage taken (Great mod as always / 4* exclusive)
+% Critical damage (Amazing for high critical characters / 2* exclusive)
+% Critical Rate (Amazing for high critical characters / 2* exclusive)
+% HP (1* exclusive)
+% Hit rate (Amazing for most characters / 1* exclusive)
+% HP Regen (Great depending on your char / 5* exclusive I think??)
The rest depends on your needs.
+Attack by %MP (Great mod if you have a crap load of MP)
+DoT Recovery (Not a bad mod to have but might be pointless in PVP)
+% Dodge (Great mod depending on your character)
+MP (Great mod if your character needs some MP)
MP Regeneration (Great mod if your character needs some MP)
+Dodge by %Defense (only really good on high defense characters)
+Hit Rate by %Crit Rate (Always a good mod to have)
+Crit rate by %Defense (Good mod here too)
Useless mods: +% Damage to (whatever)

PVE WEAPONS
Crit Build
+% Damage
+% Attack
+% Critical damage
+% Critical rate (Could be better than critical damage depending on your char)
+X Critical rate
+% Hit rate / +X Hit rate / +X Attack
+X Damage

Hit Rate Build
+% Damage
+% Attack
+% Hit rate
+X Hit rate / +X Attack
+% Critical damage / +% Critical rate / +X Critical rate
+X Damage

PVE ARMOR
Defensive Build
+% HP
+% Defense
-% Damage Taken
+% Regen
+X Defense
+X HP / +X Dodge, +% Dodge (PVE monsters have awful hit rate so some dodge would be nice)
+X Regen / -X Damage taken

Dodge Build
+% HP
+% Dodge
-% Damage Taken
+% Regen
+X Defense / +% Defense
+X Dodge +X Regen / -X Damage taken

PVE JEWELERY
+Attack by %HP
+% Attack (5* exclusive)
+% Defense (5* exclusive)
+% Critical damage (2* exclusive)
+% Critical Rate (2* exclusive)
-% Damage taken (4* exclusive)
+% Hit rate (1* exclusive)
+% HP Regen (5* exclusive I believe?)
+% HP (1* exclusive)
+% Damage to Boss/Minion (Remember that these mods only work in PVE. But for the most part minion damage will make your PVE life WAYYYYYY better)
+% Damage to Nep
The rest depends on your needs.
+Attack by %MP (Great if you have a lot of mana)
+DoT Recovery
+% Dodge
+MP (Great for heroes with a bad mana pool)
MP Regeneration (Great for heroes with a bad mana pool)
+Dodge by %Defense (Great for tanks/high defense DPS)
+Hit Rate by %Crit Rate (Great for critical builds)
+Crit rate by %Defense (Great for tanks/high defense DPS)


GAME MECHANICS
HEALERS
Gear and Potentials: Speaking strictly of pure healers, Attack % and Flat Attack are by far the best stat for the weapons because they directly scale your heal. +% Damage and flat Damage do no contribute to heals at all from what I've seen, so they're quite useless unless you have battle healer like Mu or ShuShu in which case you definitely need to prioritize +% damage. Critical damage and Critical rate do however contribute to heals, so a high Attack and high crit damage Mu will definitely heal for a crap ton. For instance if your mu has around 22000 attack, 40% critical damage and max third skill, every time she crits she will be healing your team for ~36000 HP. Also note that % Damage to Nep also works on heals when in a Nep dungeon.
edit: Certain healing spells take into account damage % so read your skills carefully