Materials are obtained by salvaging items in the salvage cube. On their own materials have no function, but they are essential for crafting items and training Artisans, and may have other unrevealed purposes as well.
Salvaging
To obtain materials, placed items into the Salvage Cube, and click the salvage button. The cube opens back up, revealing the raw materials your unwanted items were reduced to. Materials stack up in the inventory, and are automatically apportioned out when needed by the Artisans.
Only a few materials are known so far:
Rare Materials
There are numerous types of materials, including some very rare ones that can only be obtained by salvaging very high level items. Since rare materials are needed to craft high level recipes, players will have to work to find uncommon items that they don't actually want to use, and may end up debating between using, salvaging, or trading a nice item.