Game progression

Ive been playing for 2 days, and I dont understand the progression system.

Right after the short tutorial, I was able to craft 3 sets, and a mage staff and 3 basic weapons.

Well, after clearing the first zone, exploring every bit of it and preparing for the final fight, the second dungeon, I was surprised I didnt get a single upgrade. Well, I did that dungeon and still didnt get a single upgrade.

So I moved to the second zone, enemies are much stronger than my items, which I got 15 minuntes into the game and havent gotten anything better, still found a zone with materials, built a house and started collecting.

Well, after building many crafting stations.... I still cant get a single improvement. Well, yes, I can build a block focued set, thats the only new thing I got.

I understand I need to gather materials to unlock recipes, and I like that. What doesnt make sense, is that I need to explore the second zone, with items I got on my first 15 minutes of the first zone.

It totally looks like theres an entire tier of items missing at the end of the first zone... Have I missed it?