Spiritbond?

What does spiritbond do?

At 100% spiritbond, most items can be converted into materia.
Around level 20, the main scenario sends you to a goblin near Black Brush Station to explain materia. There is a side-quest there that explains spiritbond and unlocks materia creation.
Materia can be added to crafted gear to improve the gear's stats. The same class that can repair the gear (noted in the tooltip) can also meld materia to it.

To build Maiandra answer:
Materia is also used in the Relic Weapon quest (Novus) stage. Desirable Tier IV materia (Savage Might and Savage Aim) are a great Gil revenue source, as those usually sell for 350K - 800K depending on demand cycle.

The level of the item spiritbond will term with Tier of materia is produced.
Lv.1-29 - 90% Tier I, and 10% II
Lv.30-44 - 90% Tier II, and 10% III
Lv.45-55 - 90% Tier III, and 10% IV
Lv.70 - 50% Tier III, 50% Tier IV
Lv.90 - 30% Tier III, 70% Tier IV
Lv.110 - 100% Tier IV

An item will only gain spiritbond through usage. That could be crafting, gathering or combat. Combat produces the highest rate of spiritbond by far.
An item will only gain spiritbond on actions "near" the level.

E.g. Combat spiritbond gain
Monster level 25 and Item level 22 - this will produce spiritbond gain.
Monster level 25 and Item level 55 - this will not produce spiritbond gain.
This holds true for gathering and crafting also, just replace monster item level crafted/gathered.

The effective range -15 to +10 monster levels from the item level. Additionally, the closer to +10 you are, the higher spiritbond rate.
Other ways to increase spiritbond rate are:
The item is High Quality +20%
The item has materia melded to it; +20% per meld

Quote:

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Originally Posted by ChameleonMS

Desirable Tier IV materia (Savage Might and Savage Aim) are a great Gil revenue source, as those usually sell for 350K - 800K depending on demand cycle

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100-200k these days, probably due to soon implementation of grade V materia.

Quote:

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Originally Posted by Nyonmyan

100-200k these days, probably due to soon implementation of grade V materia.

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No it's probably just the low amount of people gearing up this close to the expansion, most just stick with the cheap token/tome gears and they have no meld slots..

I have a feeling once HW hits, materia prices will skyrocket again, especially the crafting materia so I'm making a healthy stock of those..

tier V materia, we don't even know if it'll be introduced with 3.0 or if it'll be at a later patch it's all just speculation at this point iirc.