Promote hero to 2 stars:
Go to hero icon and then Enhance tab. Use Enhancement Lolite on the enhance tab. At enhance Rank 10 you can upgrade your hero level up to level 60 and they will also be 2 star. Every 5 ranks on the Enhance tab it seems your star level goes up as well as being able to raise your hero level.
Artifacts:
Go to the hero icon and then to the Artifacts tab. You can use your shards and beryls there.