The core concept: Break down gear in order to upgrade the gear you have.

Let's say we have these iLvL brackets:
LFR/Dungeons/World Quests/PvP: 430
Normal raids: 440
Heroic raids: 450
Mythic raids: 460

In order to upgrade your bracers you'd have to break down a certain amount of other bracers for the materials needed.
The lowest bracket (430) would require a lot of bracers to break down (for example 16) in order to upgrade them by 5 iLvls up to a maximum of 445.
Normal raids would require fewer bracers (for example 8) to upgrade them to a maximum of 450, 5 iLvls at a time.
Heroic raids wouldn't require that many (for example 4) but you would only be able to upgrade them once to a maximum of 455.
Mythic raids would only require two but you would also only be able to upgrade them once to a maximum of 465.

In essence this means that if you do easy content you'll have to grind your ass off in order to get good gear, if you do hard content you won't have to grind much at all and you'll still get better gear.

M+ could easily fit into this by having each range have their own bracket just like raids, but obviously you'd have to break down a lot more items since the supply is essentially endless.