Author - toejmand

What is refining a weapon?

Refining a weapon will increase the weapon's damage potential. Usually displayed as a "+xxx" next to the damage on the weapon (Example: Damage 54 to 70 "+60").

Refining a weapon will allow you have a more powerful weapon at a earlier level and to also extend the use of the weapon for your coming levels.
IMPORTANT NOTE: There is a risk to refining a weapon. It is possible that the weapon and refining material could be destroyed during the refining process. You will have some blood essence returned when failing at higher lvl refinement. (from 1-6 Blood essences returned)

Ok, I understand the concept and the risks, now how do I refine my weapon?
Step one to refining a weapon is the purchasing of the refinement material for level 1, and 2 if you choose. From level 3 to level 9 you will have to do a resource collection for the material, blood essence is the required collection.
The level 1 and 2 refinement material can be purchased at the Hefei General Store.

Hefei General Store
Merchant: Su Shangruo
Location: Hefei
Position: 166 by 198

Refinement................Name....................Requirements
.......1...........Blood of Sleeping Dragon......1000 Gold
.......2...........Blood of Crouching Dragon....3000 Gold

Step 2 is taking your weapon and refining material to the Master Refiner.

Master Refiner
Merchant: Mo Tailan
Location: Hefei
Position: 160 by 177

Refinements must be done one level at a time. Also the cost for the refinement goes up for each level.
With level 1 costing 1000 gold and level 2 costing 3000 gold.
Talk to the Master Refiner, a new window will pop up. Adding your weapon to the window will have it tell you which of the refining material is needed for the next refinement on the weapon. For a level 1 refinement it will ask for the "Blood of Sleeping Dragon". There is no risk involved in refining lvl 1 and 2.

A level 3 refinement is basically the same, but with the refinement material having to be procured though resource collection. The NPC that offers the resource collection is Refinement material Merchant.

Refinement Material Merchant
Merchant: Luo Renqiu
Location: Hefei
Position: 212 by 163

The Refinement Material Merchant only takes blood essence as trade for the refinement material. Blood Essence can be gained either through monster drops, blood point counter or trading them in the Hefei Market, where they they are in the plenty. Conquerer's Cave is a good place to go hunting for blood essence, you will want to be mid Five Dragons level before attempting entering the Conquerer's Cave which is located in the PvP-enabled map Bloody Plain. Once your blood counter hits 999, it will change to a clickable button, which will, after clicking it, reset to zero and give you 1 blood essence. The blood counter will go up as you kill monsters, but you will loose all blood points gained if you die (PvP does not reset your blood counter neither will you lose xp this way, however you will loose karma points)

Refinement..........Name...........................Requirements
........3........Blood of Mist Dragon...........1 Blood Essence
........4........Blood of Roaming Dragon....2 Blood Essence
........5........Blood of Rising Dragon........4 Blood Essence
........6........Blood of Cloud Dragon........7 Blood Essence
........7........Blood of Thunder Dragon...10 Blood Essence
........8........Blood of Sky Dragon..........15 Blood Essence
........9........Blood of Monarch Dragon....20 Blood Essence

From level 3 to 9 your weapon will have a glow to it, when held by your character.
Lvl 3 :: Weak White Glow
Lvl 4 :: Strong White Glow
Lvl 5 :: Weak Green Glow
Lvl 6 :: Strong Green Glow
Lvl 7 :: Weak Azure Glow
Lvl 8 :: Strong Azure Glow
Lvl 9 :: Red Glow

[Source]Official Forum