In the Collection Book you consume schematics (weapon/trap), heroes, survivors and defenders to put into your collection. You can also recruit/research some items from the book to obtain it. Each item can be put in once and it grants your Collection Book some experience based on the rarity and level of the item. Consuming heroes level up your Collection Book faster than the others. There are rewards up to level 500.
V-Bucks rewards have been removed from the Collection Book in patch v6.30!
Collection Book levels which granted V-Bucks before the patch v6.30.
It is not advised to put any Epic or Legendary items to the Collection Book because you will need them for the Legendary Transform Keys if you plan to play the game further. Remember that the Collection Book consumes the item from your account inventory. You can unslot items to regain them for 20 V-Bucks. Collection Book doesn’t allow you to consume your favorited items to prevent accidents!
Ways to get items for Collection Book without using V-Bucks
Events grant a lot of Event Specific Llamas without the need to use V-Bucks and some Daily Login Rewards as well as Collection Book levels grant you Llamas. Some Timed Missions, Quests and Storm Shield Defenses rewards Mini-Llamas which grant low tier items.