TLDR: Use Rainbow material only for your main weapon.
There are a few different ways you can get upgrade material for your Weapons, Armour and Gear:
- From runs: Loot from kills (chances improved with Crafter perk, more drops in Gun Dungeons), Hidden Treasures and JackBot’s Jackpot
- From Crates: Metal (the ones in the shop and the random popups labelled “Rare”) and Gold; the 2nd item is almost always upgrade material (rarely a Common item in Metal and Uncommon in Gold)
- From scrapping unwanted items (10 for Common, 20 for Uncommon, 30 for Rare, etc)
- From Gun Dungeons: Rainbow material for clearing Medium and above difficulties
The chances of receiving a particular type of material used to be, approximately
- 40% for Gear (i.e. 10% for a particular type of Gear)
- 25% for Armour (i.e. 5% for a particular type of Armour)
- 25% for Weapons (i.e. 6.25% for a particular weapon if you are a F2P player with only 4 weapons, going down to 3.5% if you have all 7 weapons)
- 10% for Rainbow material
I’m not sure how the Premium Gear affects this but I think the ratio between the above items are still the same
Because it’s so easy to get Gear upgrade material, it doesn’t make sense to use Rainbow material to upgrade Gear.
If you only have the 4 free weapons, you will likely find yourself stuck for Armour material more often than weapon, but the upgrades get really expensive at higher levels and once you start playing at that level doing more damage is the only way to proceed - the marginal extra health from armour upgrades won’t get you much further.
If you have 5 or more weapons the bottleneck will be Weapon upgrade material, so then it becomes an easier decision.
If you are working on multiple weapons because it’s fun to play with different guns, I’d recommend using the rainbow only for the main weapon