What is the most efficient way to create a fighting system?

The question your asking is relatively vague, while I understand as a reader then you want to create a sword/dagger weapon, I don’t understand what that entails. Do you want blocking, parrying, combo’s, and so many other things?

To answer the questions asked directly, as to how you should handle hitboxes and potentially stuns.

Stuns, stunning will be up to you, you can use your hitbox handler to detect when a user is hit and then play an animation, set platform stand, etc…

To do hitboxes really comes down to you the developer. I don’t recommend doing “Touched” due to the logic being known to being extremely buggy, see the following post for more details as well as an efficient way for hit detection.