Badges can be obtained by leveling your hero to lvl 40. The first badge you will get is a blue one.
They can’t be removed from your hero. In order to improve badges you need Gold, Fancy Essence and in late game Eternal Essence.
There are 6 different levels / rarity on badges.
I order to acquire a higher level, you need to upgrade them.
Higher rarity/level gives you higher stats.
The following link/chart shows you all possible skills / stats and upgrade costs on each badge lvl.
I would rather save the resources to upgrade instead of converting your badge. I would start converting at Orange shards with 1 star and than at 5 stars. Don’t waste resources in between. Rather safe until you can directly upgrade from 1* to 5*.
Since the update was released we are now able to upgrade Orange Badges to Orange badges with Red Stars.
In order to Upgrade a maxed Orange badge to a Orange badge with 1 red star you need Eternal Essence.
G = Gold, FE = Fancy Essence, EE = Eternal Essence
—> 1 red *: 18M G, 13.2K FE, 100 EE
—> 2 red *: 20M G, 14K FE, 125 EE
—> 3 red *: 23M G, 14.8K FE, 160 EE
—> 4 red *: 25M G, 15.6K FE, 200 EE
—> 5 red *: 28M G, 16.4K FE, 250 EE
—> 1* red: 1860K G, 1320 FE, 10 EE
—> 2* red: 2080K G, 1400 FE, 12 EE
—> 3* red: 2320K G, 1480 FE, 16 EE
—> 4* red: 2560K G, 1560 FE, 20 EE
—> 5* red: 2800K G, 1640 FE, 25 EE
The following pictures show you all possible stats on the new Badges.