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While traveling around Arcanum, you'll no doubt find several altars to the ancient gods of the world. If you talk to Aldous T. Buxington at the university in Tarant, he'll give you some clues about what the altars can do. In particular, he'll give you a book describing the gods and what you should offer them, and he'll have a painting called "Mazzerin's Mystery" hanging on his wall. The painting (shown above) gives you the relationships between the gods.
If you just go to an altar and give the correct offering, you'll get a blessing. The trick is to give the offerings in the correct order so you can accumulate blessings and eventually gain Velorien's (the All-Father's) blessing.
There are three circles of gods. When you give an offering to the greater god at the end of a circle, you'll lose all the other blessings from that circle. And when you gain the blessing from Velorien, you'll lose the blessings from the greater gods. However, you don't have to continue making offerings if you don't want to. If you prefer the blessing you have to the one you would gain, then there's no reason to continue.
Here are the gods you need to donate to, in the order you need to make the donations:
First Circle
Lesser God: Ter'el, Elven God of Wisdom
Altar Location: Falcon's Ache
Offering: Li'tani (sold by the elven trader in Ashbury)
Blessing: +1 perception, +4 bow
Lesser God: Makaal, Bedokaan God of the Hunt
Altar Location: Bedokaan Village
Offering: Heartstone (found lying on the ground in the Bedokaan Village)
Blessing: +1 dexterity
Note: If you betray the Bedokaan lizards to the poachers, the altar will stop working.
Lesser God: Alberich, Dwarven God of Stone
Altar Location: Wheel Clan
Offering: Lava Rock (found on the ground in numerous dungeons)
Blessing: +1 strength
Lesser God: Geshtianna, Human Goddess of Love
Altar Location: Stillwater
Offering: Passion Root (found on the ground nearby)
Blessing: +1 beauty
Greater God: Halcyon, God of Truth
Altar Location: Vooriden
Offering: Olive Tree Branch (found in the Wheel Clan garden)
Blessing: +2 willpower, +2 perception, +4 spot traps, +4 heal
Second Circle
Lesser God: Torg, Ogre God of Heart
Altar Location: Torg's Altar
Offering: Ruby (found in numerous places)
Blessing: +1 constitution
Lesser God: Bolo, Halfling God of Thieves
Altar Location: Bolo's Altar
Offering: Any Ring (found in numerous places)
Blessing: +4 pick locks, +4 pick pockets
Lesser God: Kerlin, Gnome God of Gold
Altar Location: Kerlin's Altar
Offering: Mnura Coin (found in numerous places)
Blessing: +4 haggle, +4 persuasion
Lesser God: Shakar, Orcish God of War
Altar Location: Kree
Offering: Bone Dagger or Reaper's Axe (bone daggers can be found in the First Panarii Temple catacombs and in the old Caladon sewers; reaper's axes are sometimes sold by gypsies)
Blessing: +4 dodge, +4 melee
Greater God: Moorindal, God of Shadows
Altar Location: Ancient Temple
Offering: Black Diamond (found at the Ancient Maze, the Bangellian Deeps, and the Caladon Palace)
Blessing: +8 backstab, +4 prowling, +4 melee
Third Circle
Lesser God: Alberich
Lesser God: Makaal
Lesser God: Kerlin
Lesser God: Bolo
Greater God: Kaitan, God of Balance
Altar Location: Gorgoth Pass
Offering: Geode (found in numerous places, including on the ground right by the altar)
Blessing: +1 beauty, +1 charisma, +4 bow
Final Blessing
All-Father: Velorien
Altar Location: Vendigroth Ruins
Offering: Yourself (just walk onto the platform)
Blessing: +100 hit points, +100 fatigue, +12 melee, +12 dodge, +12 pickpocket, +12 firearms, +12 persuasion, +4 dexterity, +30 damage resistance, +30 magic resistance