What exactly are chao grades? Chao grades are grades your chao have to mark performance rates for each stat. Chao have a grade in Run, Swim, Fly, Power, Stamina, Luck, and Intelligence. However luck and intelligence can not be seen. The higher the grade, the higher the stat increase for each level you earn. Typically, say if you had the grade "E" (being the lowest) in stamina and you increased a level in stamina, it'd go up 15 to 17 points (the little +number that floats when you gain a level). So at that rate, by the time you hit level 99 in that particular stat, you'd have about 1500 - 1700 points (do the math yourself to see this). You'll learn how exactly stat points work later on, but for now let's continue on with the example. Now compare the 1700 (15+ - 17+ increase) to a chao that has an S in stamina. S is the highest grade, so the highest increase rate per level. The general increase rate for an S grade is +27 - +30. That is a significant difference. By the time you reach level 99 on a +27 - +30 increase, you'd have approximately 2700 - 3000 stat points! That's definitely a big deal!
Some of you may want a chao with good grades in everything, this is not too hard and I'll explain how grades are raised. The only way a chao grade can go up is when your chao evolves into it's adult stage. When the chao is evolved, depending on which type it was turned into, example, a swimming, flying, running, stamina, or power type decides where the grade increases. The grade increasing stops there for that lifetime. After you have evolved your chao there is no way it can raise anymore grades, so the next step after that is to let your chao live the rest of its life off, and then allow it to reincarnate (ofcourse by treating it nicely). Then ofcourse, you can start all over again (it will keep its grades from its previous life), and then you would just repeat the procedure on raising grades.Chao Levels are almost useless, as all they do is limit the amount of statpoints you can earn. It really does not matter where you are on a base from 0 to 99, besides the amount of statpoints you have where you are. There are varying amount of techniques you can use to raise chao levels however, so here's how to. You can feed your chao animals, and chaos drives you find throughout stages. You can also feed your chao fruits obtained from tree's in the chao garden or the black market. Chao levels are seperated by 10 blocks that each animal, fruit, or item can give a different amount of. Once the 10 blocks are filled, a level is earned. The blocks earned are highlighted in yellow when the item of choice is fed to the chao. The animal, item, or fruit of choice may also take away from the blocks on the way to the level, but never will take a level away. The blocks being taken away are highlighted in red. This concludes the complications on chao levels!Chao Stat Points are what truly determines a lot on how skillful your chao is. As said elsewhere, the level does not determine the quality of the stat, the stat points do. If you had the level 99 in running for say, and 0 stat points (let's assume you hacked a chao like this), it wouldn't be able to do anything but crawl, because stat points determine the speed and whether or not it can walk or run. The amount of stat points you are able to earn legitly is determined by the grade you have in the particular stat. As explained in the grade section, an E would earn you 15+ in that particular stat per level for stat points, and an S would earn you +30 tops. That's a 50% increase in what the max stat points you will be able to earn are!
Mathematically, the highest amount of stat points you could earn for your chao is 3266. That would be the perfect amount. Ofcourse, this is assuming your chao has had max capable stat points before reincarnation, and then obtained maximum stat points again. This is because after you reincarnate, you keep 10% of the stat points from the previous life.
In chao hacking, a lot of people who use typical AR codes find that they can only obtain the maximum of 9999 in a stat. Now, if you have tested a chao out with 9999 stat points in everything, you'd find out soon enough that they are pretty fast at what they do. However, that is not the max. That is only the max stat points you can SEE. Forunately, what chao hacking has enabled us to do was to increase the number of 9999 stat points to 65,535, which is SIGNIFICANTLY faster. Nearly 65 times faster, which is a lot when you are dealing with them kind of numbers on a CHAO's stat points. However, when it comes to them kind of stat points in the strictly invisible chao luck and intelligence stats, the chao will glitch out in races. A typical error is for the hacked chao to be "so lucky and smart" it can not figure out how to do the jack-in-the-box at the beginning of a race.Chao Luck and Intelligence are the hidden aspect of Chao stats. They effect what the name says, your chao's luck and intelligence. Intelligence can be observed in the aspect of how fast they open up a jack-in-the-box for instance, and luck would be if the toy ends up scaring them or not. Luck and intelligence for me was acknowledged by the hacking manual, as they were 2 unknown area's to me where I could enter grade, level, and stat point input.
Amateur research signifies that stat points and levels in intelligence can be raised by "blue type" animals, as in, animals that appear on your pause screen with a blue background (the skunk, the sheep, and the raccoon). However, it still remains unknown to me what method could possible be used to raise the grade on theses stats. If you are wondering how to raise luck, it has been found out that luck is increased by mythical type creatures (the background on these are generally orange, referred to properly as "legendary creatures", I am also assuming black animals may work aswell since they too raise all stats). Also, you can use mushrooms (an item from a tree) to raise luck and intelligence.
The rate of chao intelligence and luck increase is purely based on the kind of personality it has. However, I have not done any independent research on this yet, so I have no information to prove you with on how this exactly works. One mushroom however increases the level in luck and intelligence by at least 1 depending on personality.