My word that sounds painful. This sounds like the kind of system where doing it on anything under rank 50 would be pointless though, and just be another thing that no one does until they close in on level cap. I cant see people wanting to waste good materia on anything other than equipment they'll be pretty much keeping for good, unless all materia is at the same kind of grade.

I'm keeping my fingers crossed that there wont be any SUPER AWESOME materia and that itll all be pretty standard and easy to acquire for people, perhaps having tiers based on the level group of the gear and not the gears individual rarity. That way we can just add our own personal touch of customisation (little bit of acc here, little bit of str there.) Otherwise it just turns in to another one of those things where everyone has to have the same best materia on the same best equipment, and if you dont youre 'lol'. IF thats the case then i could agree with losing your materia, because it shouldnt kill you to be able to get back what you want again, but losing the gear really is overkill.

SE are quite big on punishment though, i dread to think about what their 'dark side' of materia involves and how it could be any worse than losing your materia AND gear. It'd have to be something like killing every character on the server and deleting your account if you fail, or something. =S