I’m writing this guide because I saw a lot of players in this sub throwing around their idea of ATK%, its diminishing return and why you should only invest in DMG% (after Critical) instead.
They are wrong. (Halfwrong anyway)
To understand why they are wrong, let’s start with how diminishing return actually works.
(Warning: Wall of text. TL;DR below)
Total ATK calculation
To understand how diminishing return work, you must understand how to calculate Total ATK. Total ATK is the ATK you see in the character screen when you press C. It is calculated by:
Total ATK = Base ATK + (Base ATK * ATK%) + Flat ATK

Base ATK can be viewed in Details page. It is the sum of that character’s Base ATK and their weapon’s Base ATK.

ATK% is the SUM of all ATK% sources your character have. This includes, but not limited to, weapon, weapon ability, artifacts, artifacts set bonus and Pyro Elemental Resonance.

Flat ATK is the SUM of all ATK increment sources. This is not to be confused with ATK%.
Now where is the diminishing return? Answer: There is none. Not a true one anyway. True diminishing returns will actually reduce the number you get the higher you stacks it. In this case, you get the same number, but its value get reduced significantly instead. Pseudo diminishing return if you will and it lurks in how ATK% is stacked.
Let’s have an example, Let’s have Base ATK = 1000, ATK% = 0% and Flat ATK = 500.
Total ATK = 1000 + (1000 * 0%) + 500 = 1500.
Now let’s add 50% ATK to this formula:
Total ATK = 1000 + (1000 * 50%) + 500 = 2000.
That means by adding 50% ATK, your ATK will increase by 500 which is 33.33% increase from 1500.
Another example is, what if you already have ATK% stacks before hand? This time let’s have Base ATK = 1000, ATK% = 100% and Flat ATK = 500.
Total ATK = 1000 + (1000 * 100%) + 500 = 2500.
Now let’s add 50% ATK to this formula:
Total ATK = 1000 + (1000 * 150%) + 500 = 3000.
That means by adding 50% ATK, your ATK will increase by 500 which is 20.00% increase from 2500.
Conclusion: By stacking your ATK%, your attack damage will increase by the same number (500 in the example) but it’s value will get diminished if you already have higher ATK% on that character. (33.33% to 20.00%) You will NOT lose anything when you stack higher ATK%. It’s just that it is better to spend your resources elsewhere that has better value.
DMG% Stacking
This is where DMG% come into play. It is another way to increase your damage while not overly stacking on ATK%. Since DMG% is not stacking additively with ATK% (It does not get SUM together with ATK% in the above formula), it gains more value as you stack ATK%.
Now why would I say DMG% stacking is not the solution? That’s because DMG% suffers from the same diminishing return!
Now someone would ask, which DMG% is stacking additively to each other? The answer is ALL OF THEM.
Elemental DMG% (Pyro, Electro, Geo DMG%, you name it), Weapon Ability DMG%, Geo elemental resonance, hell, even Mona’s Burst that increases your DMG%. They are all stack additively.
Because of this, the character with high DMG% is better off with ATK%. (Looking at you Klee and Ningguang). People are starting to say that Geo resonance is better than Pyro resonance. They are wrong.
Real world example from my Klee. I currently stacks 90.2% ATK and 83.4% DMG on her. With Pyro resonance (25% ATK), her damage number increases by ~10.3% but with Geo resonance (15% DMG), her damage number increase by ~8.8%. For my Klee, Pyro resonance is better than Geo resonance all the way. However, if your character is leaning more toward ATK% (like 100% ATK to 60% DMG), Geo resonance will probably be better.
Balance is the Key
Now that you understand this, you should not diss ATK% entirely especially on a character like Klee or Ningguang who has baseline Elemental DMG% from ascension. For a catalyst user whose damage is always elemental, it is still better to have DMG% a little bit more than ATK% though, something like 1020% more is a healthy amount. However, there is no golden rule that DMG% > ATK% or anything. As the title say, balance is the key.
Also note that Critical Chance/Damage is always a better option to invest in. This article is more about the relationship of ATK% and DMG% but you should invest more in Critical especially for your main DPS.
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TL;DR
DMG% also stack additively from all sources. There are no DMG% that is not stack additively to each other except Crit DMG% so overly stacking DMG% is as pointless as stacking ATK%. You should have both of them at a healthy balance (around 7080% for both at current end game) and focus more on critical chance and damage.
The DMG% bonus listed under Elemental Mastery however is not additive with other DMG%’s. With teams using reactions, this should be balanced as well. The last multiplicative “DMG%” bonus comes from RES reduction. Using the 4piece Anemo set can reduce enemy resistances by 40%. Zhongli’s shield reduces ALL resistances including Physical by 20%.
Keeping RES reduction in mind for team composition will contribute to large damage increases.
A simplified formula to remember when trying to increase your damage would be:
ATK * DMG%Bonus * EM Bonus * RES% Reduction = Total Damage