level 1 increases your damage by 3 points when sneaking
level 2 does the same as level 1 but applies a second stack when invisible
level 3 increases the values of 1 and 2 to 6 points of extra damage per stack

idk how you would use it because the mobs have longer attack reach than the dagger and you basically have to be inside the other mob to attack it.

I think to add to this suggestion it should require a backstab instead, because you could just press sneak right before attacking to get the bonus. But the idea for invisibility potions is great and would be an incentive for potions and a way to get the bonus without backstabs if you're in a group fight or something.