I figure at some point a guide will be made by someone that clearly lays everything out but in the meantime I thought I'd lend a hand by sharing what I've found out for people who've yet to get into it.
El Dorado is the newest part of COL2 that focuses exclusively on the defensive prowess of your heroes. Basically your heroes defend a predefined base (you can move the buildings/heroes where you want) against a number of incoming enemy heroes/mercs. Similar to the solo dungeon campaign you successfully defend each base one after the other. At the start of each challenge you will see a random reward list. With a successful 3 star defense (enemy getting 0 stars) you will get 3 of these random rewards.
Below the reward list is a power cost and an energy cost. Energy is replenished over time (or by potions) and power is acquired through equipment.
For now there are 3 main pieces of equipment one of which (Thunder Blade) you will get for free after 3 successful El Dorado challenges. You can look under the "Shop" in the Forging Block to see the equipment and also materials available for purchase with gold/gems.
Materials are used for creating/upgrading equipment. Once you have your Thunder Blade you can see under the forging block it lists an equipment skill, level, power and buttons for bonus attributes, upgrade, and evolve. You will also notice 5 circles around the Thunder Blade icon. If you tap one of the circles it will tell you what materials you need to upgrade it and what bonus it will give. In order to activate some of these bonus upgrades you will also need to upgrade the thunder blade itself. You do this by using EXP stones. Each one gives 100 pts (I believe). Each level up will require more exp stones for the next level. You will need to farm any el dorado challenge to acquire exp stones. You will need to farm specific challenges to get specific stones required for bonus upgrades.
As you progress through the challenges you will notice that there are certain power requirements. Power comes from equipment. At least one of your defending heroes will need to be equipped with the thunder blade to meet the power requirements. You must upgrade your thunderblade (and create more/new equipment) to reach higher power requirements. This feature forces players to upgrade equipment and farm (except for some gem spending) in order to progress through El Dorado. The energy feature also prevents players from racing through el dorado by farming endlessly to upgrade. Each challenge requires a certain amount of energy to attempt and you must either wait or spend gems to get more energy. (your energy will gain 1 every 6 min).
At the end of each El Dorado section you'll have to beat a boss attacker. It is here you can acquire shards to make more equipment. I haven't gotten to the 1st boss yet so I will add more if someone wants to input (or after I get there).
*Sections/Boss: After you beat the Boss and 3-star all levels on each section/page, you can open the 'Chest for Aces' - the first, which is easy enough to clear through, gives you 500 rings, 50K souls, some shards to evolve the Thunder blade, and some other materials to upgrade it.
After this stage you should have evolved the Thunder blade to +1, and you want you overall power to be at least 30. That is what is required to start the next section. It goes ever upwards as you progress. But the chests for Aces rewards improve. From page 2 on, you'll start to see mutagen, plus more rings + souls.
The first boss drops 0 to 3 thunder blade shards. You need 50 shards to forge a new blade, if you don't want to spend 5000 gems to buy one. You can forget it from the heroes/item screen tab. You can only fight the boss 3x a day though, but spending 50 gems gives you 3 more tries for the day. 100 for next 3 etc etc. Overall, it's cheaper than buyng a blade for 5000 though, prob can get it with 1500 gems just farming the boss.
You will also need shards for evolving the blade past lvl 1 so you may not want to use them all for forging.
*Evolving spells; I've evolved the Thunder blade to +1, this can be done speedier by Auto-clearing missions you have already 3-starred. You can choose to auto-clear just once, or 10x. This uses up energy, of course. If you're not sure what materials you need for a particular section of the blade for evolve, just click on any of the '+' symbols surrounding it, this will show you what material, and how many you have currently. Underneath you will see a "go get 'em" button, clicking this will take you to the mission that holds this material. Drops are random, the more times you auto complete these, the better chance of gaining the materials you're after.
Unlike normal base defense you are in control over your heroes skills. You can set them off when they need to be set off. Because your enemies have a plethora of mercenaries it may be more useful to have defending heroes that have high AOE damage. This includes Pounder, Demon Slayer, Sapphirix, Great Sage, Arctic Lord and Ambrosia. Certain challenges focus on air units so you will have to take care to have ranged or air units defending your base in addition to melee. A Chiron with Gemini evolve seems like a MUST HAVE for el dorado as he spits out a clone for every enemy hero that pops in. Very useful!
Thanks and Cheers
PS. Sorry for spelling/grammar issues I'm not double checking atm.
*Thanks to Cagey75 for info*