I was wondering how defense is used in the game.
I cannot seem to find the defense gauge similar to stamina and attack.
So I'm unsure whether stamina is depleted or not, or whether depletion occurs at all?
There is a timer for defense MP also, so it must go down.
Any help please.

defense in MP is more passive than active, you still need to pay the proper cost how ever. there is no timer on defense, and the one for there is just for show. you can change which monster(s) protect you in a fight in the party settings. this is the reason there is only one slot for defense, so they can protect you from every player attack out there.