Ok, let's switch it up. Instead of Crab Bow, we'll use Champion's Lance. Champion's Lance requires a Bloody Lance Head from Great Buffalo. HQ Bloody Lance Heads will be extremely rare unless some changes are done here. The only C.Lance +3 I've seen for sale was up for 178 million gil and I think it's very possible they'll become even more difficult to obtain.
No successful MMO has item loss because while realistic, it is not fun. MMOs naturally slowly slide towards a post-scarcity economy, which while desirable (no matter what clueless Keynesians will tell you), does not exist in real life.
So I'll pay 180 million for an item that's roughly equal to or worse than one that costs 500k. Then I'll buy another one just for a chance to get it up to two materia. Until I manage to climb up to the full five I may have had to fork out 180 million a dozen times or more. That raises the effective gil measured cost of a HQ C.Lance with five materia to billions of gil assuming the materials even exist. And god forbid they introduce a new, superior materia type, which will make you want to purge your Lance and start all over again. Still having fun with this?With the proposed system, a player will start with HQ item with 1 materia. This will likely be stronger then an NQ item with 5 (or roughly equivalent). However, the player still has a need for another HQ item, if the price is suitable. Slotting a 2nd materia into an HQ item, while owning just the 1, is too high a risk. However, if a 2nd HQ item is bought at a satisfactory price, then the risk is substantially reduced.


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