Smithing has 4  aspects and 5 types of skills.

(1.) Production.Edit

Production is the crafting of materials or mats out of items collected throughout the game. The level you upgrade it to determines the success and amount of materials produced.

(2.) Refining EquipmentEdit

Refining equipment means to increase the base attack (atk) or defence (def) of an equipment. To do you must have special items like hematite or Damascus ore, the item refining, and optional, a special item like blacksmiths hammer. Each time this is done it only increases by +1 and there is a risk of failure which can either 

Make the item lose 1 base attack point 

Destroy the item.

(3.)Create equipment Edit

This is exactly what it says. It makes equipment that is sellable and tradeable. Most equipment dropped by mobs or bosses is not tradable but they come with preset ability's and the same is items made at the blacksmith in Sofya City. The cool thing about this skill is it comes with no abilities. You may find this weird but I will explain equipment made by this skill comes with potential. Potential is used with this next skill.

(4.) Upgrade Equipment Edit

As said in the last skill this one is used with player made weapons and armour. Player made equipment have potential which is what this is all about. Potential is used to give it an ability in exchange for materials. Let's say you bought a water staff with 36 potential --10 potential is used to give that staff a water element( and for future reference you cant use 2 elements on a weapon but only one work).