Weapons and armour should be upgraded by gaming xp as you use them. Weapon perks should unlock as you upgrade them and when you master work it you get a random star upgrade and a choice of one perk from a list of three. When you upgrade armour you should unlock mod slots, five over ten levels and three random perks which are on the armour when it drops. Each level should raise the stats and when you master work it you can choose one star to get a nice boost. When you infuse gear you should also be able to pick one star and perk to be transfered over to the other item. Plus if they are the same item, the master work should also be swapped over.