General

3% through the upgrade NPC in Commerci, and a 50% chance through an "anvil-like drop" that you can rarely obtain via Grosso Polpo/Livyatan (haven't heard of anyone getting this yet though). Each attempt via npc costs 10 Denaros per try, and upon failure, only consumes the Denaros that are offered. You can do this up to 10 times per day.

Do you lose your own items if it fails?

I thought it was 100.

3... wth, i thought it was like 10 at the least, for me anyways