World of Warcraft Item Upgrades
Upgrades to items are a method to increase the stats of an item. Depending on the upgrade type it can raise an item's Mark level or Rarity and boost additional stats.
Each item has a track for upgrading it. Each upgrade increases the cost of the following one by a specific amount.

Item Level
The value of an item's stats base increase when it is upgraded. This is the sum of all the leveled up perks (attack magic attack, attack defense). Upgrades to items can be costly, dependent on the upgrader and what kind of upgrade you decide to make. This is due to the number of perks that have to be modified to upgrade an item.
It can also be used as a gating requirement while waiting for dungeons, raids and scenarios. It is also used to limit how much PvP gear players can wear as PvP is restricted at a lower level. Players can see their average level of items on their character sheet.
When deciding whether to purchase or sell gear, players can compare the level of an item. It's a measure of the damage and quality. The level of an item can be used to compare items when looking at the inventory of a seller.
On PC, you can view the item level by pressing ALT or using the left stick on XB1 or PS4. The item will be displayed with its full description, including ilvl. It can also be found by hovering an item with the mouse cursor and typing /itemlevel in chat.
There are several theories about how the item level is determined. One theory states that the level of an item is calculated by formulas that determine how valuable an item's stats really are. It considers the fact that different perks have different values and that gems in sockets increase the overall value of the item. This can result in an item's ilvl which is calculated and is usually very close to Blizzard's real level of the item.
This isn't the only thing that affects the ilvl of an item. The location of where the item was dropped may alter its stats. For instance it can add a level to the item's haste or crit rating. Items that drop in higher-level situations will have a higher value.
Item Stats
Stats on an item are a significant part of what makes or breaks an item for players. The game makes use of them in a variety of ways to encourage players to not restrict themselves to a particular weapon, and to encourage players to experiment with other weapons. The stat mods on an weapon increase the base stats. These stat mods are then boosted by a player's skill.
Upgrades to an item can increase the stats of an item. The upgrade costs are determined by the rarity of the item. A white or grey item for instance, will only be upgraded one time however, items that has rare tiers can be upgraded several times at higher prices.
Affixes can also be used to change an item's stats. These are special stat boosts that can be added to an item by the player and they come in all sizes and shapes. The affixes could provide the item additional damage, or add a unique ability to the item (such as reviving dead or decreasing the cooldowns) or make the item unique by putting an additional name to the item.
Currently, all affixes can be rerolled by selecting them from the upgrade window and pressing the green button with circling arrows. This will cost a certain amount of gold and other items. They can also be used as upgrade gauges, similar to other rerolling methods.
In addition to Rerolling affixes and rerolls, players can also choose which stats to keep on an item when it is upgraded. The range of stats is determined by the item's level. However, all items will have at least one stat within the same range, unless it's an exclusive item, or an item that has a God Roll from a boss in a raid.
This is another aspect that could be altered by introducing an option to upgrade the equipment without having to reroll the affixes, or selecting which stats to boost. Like the base equipment, it would have to be done per item and the item comparison interface would not display all the possible stats at once.
Item Luck
The Luck stat of a player increases the likelihood of locating items as well as the properties spawned by loot and the intensity of these properties. However, it does not directly affect damage or the ability to upgrade items. It gives the player a chance to acquire better gear in earlier waves, and is therefore more valuable in the early game as opposed to later ones, since most players prefer more powerful weapon scaling and defenses over the raw damage gain.
In addition to influencing the discovery of items, Luck also increases the chances of being successful when upgrading items using the Blacksmith. This is not to confuse with the Blacksmith's overall chances of upgrading that increase with each new level of item. They can also be increased with the use of anti-materials such as a Scroll of Strength and a Jewel of Blessing.
The shields, armor, and weapons have the default Luck value of 40. These items can be enhanced with golden ingots, or spined leather (depending on their material type) for a further +40 luck or to increase the Luck of an item up to 140.
Moreover, certain items, such as the Hollow weapon that is infused with hollow can be outfitted to increase the damage of any damage-dealing skill by five percent. These items can be found in the shops or made by using the appropriate ingredients.
Item Failure
Not all upgrades work. However, there are cash shop items that allow players to boost their success rate or prevent them from losing an item if the upgrade fails.
The rate of success of an upgrade can be seen in the Honing UI. The percentage is the probability of successfully upgrading an item. This can be increased by using Additional Materials or Special materials. There are limitations to how much success rates can be increased, and the overall chance of a failed upgrade cannot be greater than 100%..
The performance of an upgrades is also influenced by the luck of the item. Every item has an initial success rate of 25%, and each item with Luck increases the chance of success by an additional 5%.
Note that item upgrades are rendered above the inventory items which means that enchantment glints and other effects may be obscured by them. If you wish to disable the upgrade overlays, the config option decoration.renderUpgradeOverlays can be set to False in the Item Upgrader CORE client config.