Transcend is a method for upgrading demons' stats, as well as adding an additional skill slot and "skill switch" slots. It is unlocked by clearing the Chapter 3 Epilogue.
Transcend requires "Transcend Stones". You can obtain these from:
Event rewards (usually 20 Stones total for a fusible 5★ demon).
Exchanging "Transcend Motes" for Stones in the shop (see exchange rates below).
Certain demons have stones available in the Karma shop, at a rate of 1,500 Karma per Stone.
Seraph and Norn Stones can be obtained with Democalypse Coins in the Democalypse shop.
Transcend Motes are obtained by summoning on certain banners.
Pulling a 3★ gives 1 Mote
4★ gives 5 Motes
5★ gives 35 Motes
Generally speaking, you can only get Motes from banners that cost gems. You cannot get Motes from free summon files, hell buns, parchments, etc!
You may only perform the Motes-to-Stones exchange for demons that you have raised to level 50 (which itself requires evolving the demon to 6★).
The exchange rate for Motes-to-Stones will vary by a demon's base rarity:
Base Rarity
Motes for 1 Stone
5★
50
4★
15
3★
10
1★ - 2★
5
Transcend Stones, much like Spirits, are unit-specific - This means that, for example, Barong Transcend Stones cannot be used to upgrade Michael.
Transcend grid progress applies to all demons of that type - For example: if you Transcended a Pixie, then that upgrade applies to all Pixies that you own, and all Pixies that you obtain later on.
Transcend Stones can be spent to unlock panels on a demon's Transcend grid.
All Transcend grids have the same general shape.
Each grid contains 94 panels, split up into these types and quantities:
Type
Quantity
(green) HP +20
x25
(pink) HP +40
x12
(green) Phys Def +20
x18
(green) Mag Def +20
x18
(blue) [stat] +25 [Atk] or +35 [Def]
x10
Skill Switch
x4
Skill Slot
x1
Transferable Skill Switch
x1
Magic Damage Reduction +3%
x1
Physical Damage Reduction +3%
x1
Max MP +1
x2
Damage Dealt +10%
x1
For the blue stat panels, each demon is automatically assigned one stat out of: Phys Atk, Phys Def, Mag Atk, or Mag Def. Their blue stat panels will only boost their one assigned stat (for example, Gogmagog's blue stat panels will only boost his Phys Def).
Enishi Matsuri characters (and Raidou Kuzunoha & Gouto) have an additional 20 panels on their Transcend grid. These panels are all batched up near the starting point, and all cost 1 stone each.
The amount of Stones needed per panel will vary by their type and position in the grid:
Green stat panels - These initially cost 1 Stone each, but increase to 2 Stones each after moving downwards from the second Skill Switch Panel, then 3 Stones after moving down from the third Skill Switch, and then 4 Stones after moving down from the Transferable Skill Switch. This amounts to 22 panels that cost 1 Stone, 19 panels that cost 2 Stones, 10 panels that cost 3 Stones and 10 panels that cost 4 Stones.
Pink HP panels - The first six will cost 5 Stones each, and the last six cost 7.
Blue stat panels - the first three will cost 2 Stones each, the fourth and fifth cost 4 Stones, the sixth and seventh cost 6 Stones, and the last three cost 8.
Skill Switch panels - The first one costs 2 stones, the second and third each cost 4, and the fourth costs 6.
If you only want the transferable skill switch + 4 skill switches, and skip all non-required panels to get there, you will need a minimum of 130 stones.
Again, note that the skill switches at the far left can be skipped - just go to the next green stat panel.
Also note that this requires taking the left path (the green panels instead of the pink panels) at the last fork. This is because the pink panels costs more stones to unlock.
If you only want the transferable skill switch, and skip all non-required panels to get there, you will need a minimum of 118 stones.
Again, note that the skill switches at the far left can be skipped - just go to the next green stat panel.
Also note that this requires taking the left path (the green panels instead of the pink panels) at the last fork. This is because the pink panels cost more stones to unlock.
The Skill Slot panel is the most-important panel in the grid. The extra slot can be used for more damage, more bulk, more speed, etc - whatever your demon specializes in.
The Transferable Skill Switch panel is the second-most-important. This allows you to change the demon's transferable skill slot (their first slot, at the upper-left), which is otherwise impossible to do. This is especially helpful for demons that have a not-so-useful skill in their transfer slot. Be aware that you can’t use Blank Genomes to extract Transferable Skills from demons.
Skill Switch panels are the third-most-important. These allow you to run multiple builds' worth of skills on a single demon, and swap them as needed.
Only invest if you have enough Motes/Stones to reach at least one of the above. If you don't have enough Motes/Stones, then there is no reason to transcend (the stat boosts are not that great), and you should wait until you have more resources.
Each panel enables a transferable skill slot to access the "sub-slot tray", starting from the leftmost slot.
Each panel also increases the capacity of the tray by 1.
So for example, the first skill switch panel lets your first transferable skill slot use the tray, and the tray has a capacity of 1 (doesn't count currently-equipped skills).
The second skill switch panel lets your second transferable skill slot use the tray, and increases the tray's capacity to 2.
The third skill switch panel lets your third transferable skill slot use the tray, and increases the tray's capacity to 3.
Using the tray, you can switch a demon's transferable skills at any time outside of combat/aura gate.
This effectively means you can have multiple builds on the same demon, saving the resources needed to panel a second copy (assuming your multiple builds are okay with using the same archetype color).
Democalypse generalists especially benefit from this, as they can have multiple elemental spells in their tray, and can switch them out according to what's needed for the day.
If you want to use him in all 7 elements, then you of course won't have room for all 7 elemental spells at once - it may be more cost-effective for him to run -dynes and overwrite them by spending common Yasaka Magatamas, rather than spending rare Blank Genomes every couple weeks to take off valuable tier 4 skills.
For which spells to keep on him, probably keep Zandyne on since it's only fusibly available from Loki, an expensive 4★.
Elohim: Run Purple with a normal Fire build in 2 slots, and a build for a different Democalypse element in the remaining 2 slots. Use in Fire Boss, but Prelim for other elements.
Izanami: Run Purple with an Elec build in 2 slots, and a Dark build in the remaining 2 slots. This saves resources, as you'd then only have to panel one copy of her.
Mastema: Run Purple with Resist Fire for Brands of Sin: Sloth, otherwise switch to a damage booster such as Light Boost.
If you only want 1 switch, then you can save some stones/motes here - unlocking just one switch costs 7 stones, or 350 motes. Make sure Resist Fire is in the leftmost slot if you do this!
"Transcend Stones". You can obtain these from:
"Transcend Motes" for Stones in the shop (see exchange rates below).
Karma shop, at a rate of 1,500 Karma per Stone.
Seraph and 
Norn Stones can be obtained with 
Democalypse Coins in the Democalypse shop.
Barong Transcend Stones cannot be used to upgrade 
Michael.
Pixie, then that upgrade applies to all Pixies that you own, and all Pixies that you obtain later on.
(green) HP +20
(pink) HP +40
(green) Phys Def +20
(green) Mag Def +20
(blue) [stat] +25 [Atk] or +35 [Def]
Skill Switch
Skill Slot
Transferable Skill Switch
Gogmagog's blue stat panels will only boost his Phys Def).
Raidou Kuzunoha & Gouto) have an additional 20 panels on their Transcend grid. These panels are all batched up near the starting point, and all cost 1 stone each.
to extract Transferable Skills from demons.
Mastema can use Resist Fire for Brands of Sin: Sloth farming, but use a damage booster for Democalypse.
Masakado A: Run Auto-Taruka/Auto-Rakunda, plus up to 3 different elemental-physical AoE spells (such as Rending Ice) for Democalypse Prelim.
Agni: Run 
Purple with Auto-Taruka, plus up to 3 different elemental AoE spells (such as Mamudodyne) for Democalypse Prelim.
Garuda: Run Auto-Taruka (or Blood Rush/War Dance/Luster Candy if manual-buffing), plus up to 3 different elemental AoE spells for Democalypse Prelim.
Red , then 
Fire + 3 other elements can be covered this way.
Ananta: Run Auto-Rakunda, plus up to 3 different elemental AoE spells (such as Mazionga) for Democalypse Prelim.
Ice + 3 other elements can be covered this way.
Ishtar: Run Merciless Blow, plus up to 3 different elemental single-target spells (such as Ice Age) for Democalypse Boss.
Light + 3 other elements can be covered this way.
Beelzebub☆: Run Merciless Blow, plus 3 elemental random-target spells (such as Holy Wrath) for Democalypse Boss
Mot: Run 
Yasaka Magatamas, rather than spending rare 
Loki, an expensive 4★.
Elohim: Run 
Izanami: Run 
Elec build in 2 slots, and a 
Dark build in the remaining 2 slots. This saves resources, as you'd then only have to panel one copy of her.
Talk • 
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Demon Summoning Pool, 
Skill Summoning Pool, 
Choice File) • 
Event Reward Demons
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Rainbow Droplet
Battle Speed • 
Team restrictions • 
Liberators
Leveling/Evolving • 
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Spirit Merge • 
Sublimation
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Mitama • 
Sin Infusion • 
Devil Connector
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Demonite
AR Scanner • Devicon • Alignment