Sacred Orb randomises the numeric values of the base defences on an armour. It is a currency item.
Armour refers to Body Armour, Boots, Gloves, Helmets, and Shields.
Right click this item then left click an Armour to apply it.
Stack size: 10. Shift click to unstack.
Note that it is currently the second-rarest currency item after the Mirror of Kalandra. For 99% of players, exchanging for Exalted Orbs is the best choice.
The Scourge expansion introduces the Sacred Orb. It is more than three times rarer than an Exalted Orb. It is currently the second-rarest currency item after the Mirror of Kalandra.
Its purpose is that a near-perfect item can eventually be perfected, at incredible cost. This is not a trivial alternate-quality system or something that is going to undermine the jackpot value you'll get when you find an amazing item that also has perfect base defences.
It would be technically possible to fix a non-perfect one with enough investment, if the item was godly enough to warrant it.
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Path of Exile: Scourge introduces variable base defences on armour pieces. This means that the built-in Armour, Evasion of Energy Shield values on an armour piece can vary from their current values up to approximately 15% more (it varies item to item). While the individual impact of slightly higher base defences is relatively modest for most items, these values matter more and more as you face harder Path of Exile content and need to min-max your characters more.
So what are the consequences of introducing variable base defences to Path of Exile?