Prefixes are random Buffs or Debuffs given to tools, Weapons and Armour. There are 7 prefixes currently and 4 are bad and 3 are good. This mean you are more likely to get a bad prefix than a good prefix, giving what prefix you get a more risky element of the game.
When you have defeated the Goblin Attack and got the Goblin Doctor NPC to move in, you have an option to Reforge an item. This means you will pay a certain amount of coins, to get your item a different prefix. This is risky as there is still a greater chance of you getting a bad prefix than getting a good one.
Godly - Sword, flail, gun, bow, magic weapon - 25% increased damage, 15% increased speed, 25% increased crit chance and 60% less Durability taken per 100 uses.
Thick - Any armor - 25% increased defense, 10% Chance not to take damage.
Broken - Sword, Flail, Gun, Bow, Magic weapon, Any armor - -25% Damage (Weapon Only), -25% Defense.
ADD FOUR MORE - ONE GOOD AND THREE BAD