See Enchantment for information and requirements on enchanting Dragons
Enchantment Materials are resources introduced in Update 2.3 as part of the Enchantment feature. They have two uses: to enchant Dragons in order to increase their Base Attack and Base Health stats and to upgrade base Habitats through levels 7 to 9. They have five grades of quality and their shape and color vary according to the material's quality and the Element they represent. While lower-quality materials can be fused together in order to obtain higher-quality materials, higher-quality materials can not be broken back down into inferior materials, meaning that fusing is an irreversible process. Enchantment Materials are mainly obtained from Enchantment Chests and ascending Dragons, but there is also the possibility of trading for them in the Whale-Mart.