How the materials was balanced

I mean I could write why but then I wouldn't finish so-
There can really only be one drop per area per method of play.
But you could totally count a fire clockwork tunnels as different from an ice one, or a T3 one as different from a T2 one, or even box drops as different from enemy drops.
The gist of this is that when multiple areas drop the same thing, that unless they are all exactly even in payout, one comes out as dominant, and players just go for that one area to farm at.
This makes the player hunt down specific levels and areas to farm at
If I need scrap metal I see that the only place I can get it is say, aurora isles, then I go for that one area. I hunt it down, and I get it. This is good because it forces variety onto the player.
No more will you only do FSC, but farm a variety of levels. Conversely, it allows the player to farm what they choose within the market. If I don't like FSC I can do arcade runs and sell my materials.
Sinks will be needed to consume materials, so that players don't have too many of them built up
Basically, a large sink is necessary to consume them. By large, I mean logarithmic. Scale-able.
First, we need log scaled crafting costs. I.e. 1000 light shards to craft a 5* item, and the ability to feed the battle sprite a TON of lower tiered mats.
Second, we need sinks that aren't just crafting new gear. Perhaps punch could get a rework to sink crowns, and an NPC could take in 1000 of a random material every week in exchange for 100K crowns.
How to implement this.
1) Remove monster drop tables and materials in boxes
2) Add materials to level drop tables instead
3) When the player kills a monster, it gets the level material for monster kill
4) When the player kills a treasure box, it gets the level material for treasure boxes

Well I say log scaled because it could be something like...
5 star = 10 mats
4 star = 30 mats
3 star = 90 mats
2 star = 270 mats
0 and 1 star = 810 mats
I think this would be beneficial because later tiers still drop light shards, etc. and you end up getting a TON of things.
Right now I have...
30-90 of each 5 star material
~500 of each 4 star material, some less as I feed them specifically to battle sprites
800-2500 of each 3 star material
1000-3800 of each 2 star material
1000-7000 of each 1 star
And 16000 light shards
This is obviously skewed because I sell my materials, craft things, etc. but the point still kind of stands.
Also consider the current crafting costs of say, amputator-
20x 0* = dark shard
5x 1* = beast scale
4x 2* = monster bone
6x Zee core = special material
2x 3* = rocket sprocket
2x 4* = silver coil
1x 5* = royal core
This already follows a sort of logarithmic crafting cost, it's just not quite there. My proposal would be to really drain your resources on materials, so that they are the dominant crafting cost.
I would also propose not quite just having EVERYTHING require these crafting costs. Rather, this would be reserved for certain items that are more optional, which would act as trophies just as much as they function as items.
A good way to do this would be to cut the orb cost on popular gear so that everyone gets it, and then proceed to increase the cost on the weird stuff, so that it funnels people towards crafting "good" gear and learning the bread and butter of Spiral Knights (blitz) before they go on to craft the French Pastries of Spiral Knights (plague needle).

Now that you explained, it looks more reasonable. I thought it could be a problem for new players, but the time you would waste finding the materials would be less or the same time to find orbs or gathering crowns and trading for energy.
The idea looks good, but 1000 light shards to craft a 5* item seems crazy.