as you progress throught sw you will gain mastery of the materials you forge increasing the quality of forged swords

with each succesful forge you have a chance of forging a rare sword some of these are needed for quests if you obtain 3 of the same rare sword you and use fusion to make an even rarer sword for your collection

Hammering any sword gives you 1 mastery point.

Finish crafting your sword awards you 5 mastery points.

And finally completing a fusion is worth 10 mastery points.