Items
Crafting magic items
Most items can be crafted with the use of essences. Refer to those pages for the specific rules.
Paragon items
Some items evolve over time as they grow with their wielder, either through magical symbiosis, adding more or better components, or simply understanding the item better. Usually, the first stage of such an item is about on par with a rare item, the second stage is very rare, and the final stage is of the same power as a legendary item.
Unlocking an item's full potential requires adventuring far and wide, researching its history, and truly understanding it. Sometimes, the upgrades requires the gathering of essences of certain kinds - and sometimes specific lost components of the items. Other paragon items will progress along with its owner's rank in an organization. Yet others might simply evolve during moments of character growth.
Some paragon items are long-dormant items forged in empires of eras past, whose usefulness is not obvious from the start. Others are the inventions of mad (or genius?) artificers with too much imagination for their own good that require testing and iteration before they are perfected.
The names given to the different stages of these items differs depending on the source. An artifact of an old god that has laid latent and unclaimed for eons might start out Dormant, progressing through Awakened to Exalted. A mad contraption of artifice or engineering might start out as a Prototype, before becoming Upgraded and ending up Perfected. An item whose powers corresponds to the wearers rank in an organization goes from Initiate to Adept to Master.
Depending on choices made during play, a paragon item might evolve in different directions. Perhaps a wand could be infused with either fire or cold magic, depending on what its wielder prefers, or a suit of armor could provide different bonuses depending on its wearer's alignment.
Importantly, Paragon items are not the only ones that can be upgraded or improved, but they are designed with that journey in mind. For an example of paragon items, look at the Inscribed Bo Staff, a Monk-specific weapon that improves their Stunning Strike and gives them some Divination magic, or the Fluxfiber Conduit, a wand that improves spell attacks considerably.
This system is inspired by the Vestiges of Divergence from Matt Mercer's Exandria setting.