How is WN7 and WN8 Calculated and which is a better indicator of one's skill level? WoT / WoTB

This question is inherently opinion based. But ill bite

"which one is more efficient to know how good of a player you are?"

Neither analyzes skill, they look at performance.

Skill and performance are two completely different things. I can beat the snot out of my friends at chess all day, but going 100000000000 in 0 against poor players will not make me beat a grand-master.

Some tanks are better than other tanks in the same class are not identical, this leads them to having trade offs. This is amplified by stock vs fully upgraded vs crew stats + equipment + perks + gold ammo + the new directives. Certain trade offs work better on specific maps, some are better on a majority.

The aforementioned amplification makes matches where you are playing against the same tier horribly unbalanced even if both teams have the same tanks. Even worse, random matches have teams composed of different tanks. Making the person who upgrades the best on average tank to its maximum potential, have extremely padded stats. Worse still, some people play in platoons which organize some of the otherwise mostly random game-play further padding stats.

Tanks and their upgrading system are far too complex to even begin to use performance averages to find net skill.

If the grand-master started without his queen or rooks, I would have more than a fighting chance. Just like chess, this game is about having more powerful pieces than your opponent and knowing where to put them. The tempo of this game is far slower than an FPS so, as long as they followed orders, all but the most incompetent players could fill in for experienced players in clans given their tanks.

My answer is based only on what I've read in sourced articles, I haven't played WoT in a while, but oh, boi, things have changed!

Both WN7 and WN8 use following stats:

• Damage dealt;
• enemies spotted;
• frags scored;
• win rate;
• defense points.

The main difference is that WN7 uses one number for all of your units (but it takes average tank tier into consideration), while with WN8 it's possible to calculate player's performance on single tank, then aggregate values together using average (not sure). To support this WN8 additionally use table of expected performance values for different machines (for example, see Exp. WN8 Dmg column in Tank List).

WN7 formulae is (source):

1240-1040/(MIN(TIER,6))^0.164)*FRAGS +DAMAGE*530/(184*e^(0.24*TIER)+130) +SPOT*125*MIN(TIER, 3)/3 +MIN(DEF,2.2)100 +((185/(0.17+e^((WINRATE-35)-0.134)))-500)*0.45 -[(5 - MIN(TIER,5))*125] / [1 + e^( ( TIER - (GAMESPLAYED/220)^(3/TIER) )*1.5 )]

WN8 is more complex:

rFRAGcMAX = rDAMAGEc+0.2
rSPOTcMAX = rDAMAGEc+0.1
rDEFcMAX = rDAMAGEc+0.1

rWINc = 0.09 + 0.613*rDAMAGEc + 0.131*rFRAGc*rDAMAGEc + 0.097*rFRAGc*rSPOTc+0.047* rFRAGc*rDEFc

rDAMAGE = avgDmg     / expDmg
rSPOT   = avgSpot    / expSpot 
rFRAG   = avgFrag    / expFrag 
rDEF    = avgDef     / expDef 
rWIN    = avgWinRate / expWinRate

rWINc    = max(0,                     (rWIN    - 0.71) / (1 - 0.71) )
rDAMAGEc = max(0,                     (rDAMAGE - 0.22) / (1 - 0.22) )
rFRAGc   = max(0, min(rDAMAGEc + 0.2, (rFRAG   - 0.12) / (1 - 0.12)))
rSPOTc   = max(0, min(rDAMAGEc + 0.1, (rSPOT   - 0.38) / (1 - 0.38)))
rDEFc    = max(0, min(rDAMAGEc + 0.1, (rDEF    - 0.10) / (1 - 0.10)))

WN8 = 980*rDAMAGEc + 210*rDAMAGEc*rFRAGc + 155*rFRAGc*rSPOTc + 75*rDEFc*rFRAGc + 145*MIN(1.8,rWINc)

Source for WN8 has detailed explanation.

As for which one is better, I think it's WN8 as it addresses some issues found while using WN7 - see Why WN8?.