As of V3.1 you can craft weapon skins using other skins. The crafting menu is located in the inventory accessed through Abble's shop.
Recipes:
3 common skins = Uncommon skin
4 Uncommon skins = Rare skin (Also has a small chance to create the stick skin.)
5 Rare skins = Ultra rare skin
6 Ultra rare skins = Legendary skin
2 Repeat skins = Random skin of given rarity
Red Batsaber + Green Batsaber + Blue Batsaber = RGB Batsaber
Nebula Y + Nebula G + Nebula P = Cosmic Dust
2 Face Coolers = Face Melter
2 Face Melters = Face Cooler
2 Face Melters + 2 Face Coolers = Chocolate Reign
White Bat + Stick = White Stick
2 Clown hammers + Chocolate reign = Archangel
Chocolate reign + Scorch + Molten Sword = Chthonian
All Colored Bats = Copper Shortsword
5 Pickaxes = Diamond Crate (Originally 10, Nerfed in 3.1R)
Chthonian + Excelsus + Cosmic Dust + Agony Knife = The Alpha and The Omega (The Yamato)
Rarity
Rarity is how rare an item skin is, going from common to unobtainable.
Common: Skin that can be found in most (if not, all) crates, appears in orange text and can be sold for 100 credits.
Uncommon: Slightly rarer skin that is found in all gifts and crates, appears in white text and can be sold for 300 credits.
Rare: A skin that's a bit rarer than uncommon, appears in yellow text and can be sold for 1000 credits.
Ultra Rare: The second rarest skin you can get from a gift or crate, appears in light-blue text and can be sold for 3500 credits.
Legendary: The rarest skin you can obtain from a gift or crate, appears in magenta text and can be sold for 7500 credits.
Exotic: Skin that is mainly only craftable, contains skins like Archangel and Chthonian. Appears in red text and can be sold for (15000) credits.
Exclusive: A skin that can only be achieved from getting badges, such as 15 killstreak, A rare variant, etc. appears in green text but cannot be sold.
Unobtainable: Mainly a skin that is only available from specific actions, such as sudden catastrophe, only obtainable from playing at a specific matter of time, appears in purple text and can be sold for 13337 credits.