In crafting, you must first know the recipe of what you're trying to craft, have the necessary materials in your Material Tanks for you to extract, and then place the ingredients into the cauldron in the correct order. If done correctly, you will create a new item that can be sold in your shoppe or given to your champion.
To use the cauldron, walk up to it and press the F key to open it's menu. The menu will allow you to use any item in your inventory as an ingredient. Additionally, the cauldron contains a recipe book that will populate whenever you craft something new. The recipes that appear in the book can then be clicked on to quickly craft those items again. However, you must have the required ingredients in your inventory before you can click on the recipe.
After four ingredients have been mixed into the cauldron, it will play a dull buzzing sound if the recipe failed or a chime sound if successful. Newly crafted items will be placed in your inventory.