Sapph to the rescue! (I think this is about the fifth post I've done some fracture maths for)
The way you calculate an optimal DPS rotation is to work out the optimal "Average Potency per GCD" of a rotation. Fracture is a 220 Potency attack, broken down into 100 potency for the hit, and 120 potency (6 ticks of 20 potency each) over 18 seconds.
At level 50, the standard paladin rotation was the 123 spam of Fast/Savage/Halone. These attacks were 150/200/260 potency respectively, which averages out at 203.3 Potency per GCD over 3 GCDs. Because 220 is higher than 203.3, using Fracture was a DPS increase at level 50 over pure Halone spam (provided that all six ticks of the dot happened).
At 60 though, you get the Royal Authority and Goring Blade combos. Royal Authority combo is 150/200/340 potency, which is 230 average potency over 3 GCDs. 230 is higher than 220 so you can see that just spaming Royal Authority Combo is more DPS than any rotation that included Fracture. Goring Blade combo is even higher due to how strong the DOT is. Goring Blade combo does 150/230/220 potency (average of 200 per GCD) but also comes with a 320 potency dot (8 ticks of 40 potency each) over 24 seconds.
Now, the way DoTs work is that they tick every 3 seconds, so you can't really easily factor them into DPS if you're clipping them because it depends on your skillspeed. But to try and paraphrase things:
A rotation of Goring / Royal / Royal has an average of 200 / 230 / 230 potency over their GCDs, which is an average of 220 potency per GCD. 9 GCDs take a maximum of of 22.5 seconds to do at zero skillspeed, which means you'll be refreshing the 24 second Goring Blade DoT with 1.5 seconds left on it.
Now, some people think that it's a good idea to put a Fracture in to make the rotation Goring/Royal/Royal/Fracture, which is a 10 GCD rotation, as this "doesnt clip the goring blade dot". However, we've already established Fracture is only 220 potency, which is the same as the average potency of the Goring/Royal/Royal rotation, and thus doesnt actually gain you any dps. IN fact, all it does is put a "gap" in your Goring Blade DoT and can potentially LOSE you a 40 potency tick.
TLDR: the optimal Paladin Rotation is to do Goring/Royal/Royal as this is a 9 GCD rotation that enables you to maintain 100% uptime on the Goring Blade DoT along with 220 potency average GCD. Fracture doesnt increase this, it just drains TP and risks you losing Goring Blade ticks.
There's one other thing to it: Fracture's Dot isnt counted as Slashing Damage, only the 100 initial hit. This means that in a raid with a Warrior or Ninja providing the 10% slashing debuff, the average Potency per GCD of the Goring/Royal/Royal goes up from 220 to 242. The potency of Fracture only goes up by 10% of 100, so becomes 230 potency. Thus when Slashing debuff is available, Fracture is actually a pure DPS decrease even without factoring in DoT ticks and TP drain.
Some people also suggest that using Fracture as the final hit of your Fight or Flight can be a DPS increase - I believe maths has shown this to be incorrect provided you use an optimal rotation, as all you gain is 21 extra potency over a Fast Blade (+30% of 150 vs 220) and risk losing up to 40 potency for a lost Goring Blade tick dependant on skillspeed.


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