The League of Legends Devs recently posted a design blog about what went into developing the quests, and why.
An excerpt:
One of the major objectives of the quest system was to prevent the
emergence of a metagame that promoted capturing three command points
and turtling to hold them for the remainder of the battle. Turtling
strategies like this one are contrary to the high-energy combat that
we wanted to promote with the new game mode. So, in order to prevent
these sorts of stratagems from emerging in League of Legends:
Dominion, we instituted quests to allow us to alter the strategic
value of each command point on the fly.
A quest triggers at random intervals (I've seen two in one match, before) and will always involve two adjacent capture points, one controlled by your team, and one controlled by the enemy.
Completing a quest, that is, capturing your target point before your enemies capture their target point, gives you a short duration 10% damage buff, and immediately deals 20 damage to the enemy nexus.
Statistically, an Elo rating model can be extended to accurately model the skill of players in teams of any size.
The reason for this is that of the n players who are pulled into your game, (n/2) are on the other team and (n/2)-1 are on your team. In LoL, for example, your 5 opponents and 4 allies are chosen from the same pool of players. Between different games (assuming solo matchmaking, not necessarily a given), you are the only thing that remains constant. Over time, your contribution can thus be measured relative to others, and your Elo rating will fluctuate accordingly. The larger the size of teams, larger too is the number of games required to evaluate a player properly.
It's usually best to think of a rating as a confidence interval, and good team matchmaking systems treat it this way. For example, if your rating is 1600 and you have only a few games played, your real Elo range may be between 1200 and 2000. If your rating is 1650 and you've played thousands of games, your real Elo range may be between 1625 and 1675.
All any rating system can do is give an approximation of your skill level relative to others. It can be manipulated by playing with friends who have inaccurately rated accounts, smurfing, or just by throwing games. Nonetheless, it is the basis of virtually every rating system because the principles behind it are valid.
I know in the past LoL has modified players' Elo ratings using things other than Win/Loss and may still do so. Any time this is true it lowers the accuracy of the rating system and is conceptually terrible. This ironically goes against the logic Riot laid out in their original explanation of matchmaking here. As the link above correctly states:
The system must be “capped” zero sum, in other words, players must gain and lose points equally overall so that the “average” score in the system remains consistent.
Best Answer
Looking at the League of Legend's wikia, you have the following explanation:
Basically, it works the same as armor penetration, but adding the level of the target as a parameter: the higher the level, the greatest the armor penetration.
There is also an example to understand how the damages are calculated: