Crystal Fusion is TERA's game mechanic that allows getting new weapon and armor crystals by combining old ones. (Other methods are direct purchase from Vanguard Initiative reputation vendors, and Crystal Boxes as dungeon drop or as weekly bonus rewards). Crystal Fusion was added to game in patch TERA: Fate of Arun.
You can combine crystals (i.e. cruxes) together using a button at the bottom of your inventory to create a new crystal of the same tier, or a chance at creating a new crystal of a tier higher (niveots) using a Niveot Structure (a blank niveot crystal, which can be purchased from the Vanguard Initiative Quartermaster). The process requires three armor, or three weapon crystals of any kind and you can mix and match types. The resulting crystal is random.
If you have a lot of spare crystals lying around, you can get your first Niveot Structure by completing the Fusion Bomb achievement, which rewards the player with one Niveot Structure. This achievement required you to perform 50 crystal fusions
When using a Niveot Structure there is a chance that the fusion will result in failure. When this happens the Niveot Structure is consumed.
This process can also be used with jewelry zyrks to create vrysks.
The rare (blue) unbreakable version of the crystals can only be created by fusing three uncommon (green) niveots with a Dyad Niveot Structure. This also works off of the aforementioned mechanics and uses RNG. The new crystal is not able to be traded, but can be stored in your character bank. Creating one of these crystals also adds a secondary effect to the crystal.