How the estimate works
Stat points scale your damage. In this tool, the stat bonus grows in a straight line from 0% at 1 point to the bonus you set at max points. Buffs, like race abilities, multiply the result. Enemy damage reduction takes a percentage off at the end.
Blox Fruits doesn't publish its exact damage formula, so treat the result as an estimate. It's most useful for comparing two builds, because the same rules apply to both.
Finding the base damage
Test a move on a low-level enemy while you have 1 point in its stat. The number you see is the base damage. Write it down once per move and reuse it here.