While I wait on some art and related items for Macro, I present to you
Transmutation Card Game
Each Player starts with a Material Deck of 25 Material cards and a Transmutation Deck of 25 Homunculus and support cards.
At the start of the game each player draws 5 cards from their Material Deck and may draw 2 additional cards from their Material deck during each of their respective end phases.
Players play a Homunculus from their Transmutation deck by overlaying it on a number of Material Cards (from their hand) equal to the total cost, with a number of them sharing the same color as the Color Cost.
Players may only control 1 Homunculus at any time.
When a Player plays a Homunculus, they select a number of Material cards equal to that's Homunclus' Hit Points and flip them face down.
During a Battle, You compare the attacking Homunculus Strength with the Strength of thedefending Homunculus. If the Attacker's Strength is equal to or higher than the defender's Strength (after the effects of any and all support are resolved) the attack hits.
When a Homunculus is hit, the defending Player removes 1 face-down Material from that Homunculus (A Homunculus is destroyed when there are no face-down materials under it).
When a Homunculus is destroyed, the owner of that Homunculus discards a number of cards from their deck equal to it's Penalty. (The Homunculus and all it's Materials are also sent to the discard pile)
A Player loses when they no longer have any cards in their Material Deck.
A Homunculus may be played if there isn't already one on the Turn Player's field
Battle Phase. Support Cards may be played.
The Turn Player may draw 2 cards
Support Cards are played by discarding a number of Material Cards from a Player's hand equal to the Support Cards cost (a number of them matching it's color). Support Cards may be activated any time unless otherwise stated.
Material Burn – Is the name given to the cost of certain abilities some Homunculus may have. To pay for the ability, the player must pay the Material Burn cost by discarding a number of face-up underlayed materials that are equal to it's cost (a number of them matching it's colors). Not all abilities need Material Burn but some will still require the Homunculus to have a number of face-up materials present underneath it.
I have always enjoyed games where you need to spend your own "life pool" in order to play cards ~ it sounds like you are off to a good start!
If I don't have a homunculus in play, and my opponent attacks me, do I suffer damage to my Material Deck? Otherwise, it looks like I can only be harmed if I lose one of my homunculus (homunculi?).
Are you seeing situations in your playtesting where one player has multiple attackers and the defender can't play a new homunculus that survives more than 1 turn? I would be concerned that one player could easily run away with the game once they get the upper hand with attackers.
Can you give examples of support cards?
Well I could approach this two ways, the direct damage you mentioned OR a Homunculus to be mandatory to play otherwise that Player loses (similar to the Pokémon System, obviously though I'd need to add in some free Homunculus cards for this lest my Opponent have no resources in hand at the current time).
This is actually based on being a 1 vs 1 deal, again like Pokémon. Originally I attempted for it to be your usual bunch of monster games but it just didn't seem to work and had simply too many problems to balance.
5 Fire Material
[Material Burn - 1 Fire] When this card is attacked by a Non-Fire Homunculus, you may pay the cost, if you do, the attacking Homunculus loses 1 HP
3 Grass Material
Once per turn, you can choose 1 Grass Material from your discard pile and place it under this card.
This card gets power +1 for each Green Material under it.
1 Light Material
Target 1 Light Homunculus with a face-up Material. Flip that Material face-down. You can only activate 1 Gathering Radiance per turn.
1 Water Material
Target Water Homunculus gains +3 power until end of the turn.
Hopefully those were interesting enough to catch. I haven't actually decided on the divisions of cards, part of me wants to use Zodiac signs.
Basic ideas but I feel there is enough to get some distinction going between the different factions or whatever.