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I first had problems with it too. You have to disable matrix filtering on all sites.

Is the extension equivalent to a /etc/hosts file at that point?

I don't know /etc/hosts

You can block specific things like iframes on domains.

It's a very simple method that can prevent hostnames from resolving; see http://someonewhocares.org/hosts/zero/

Compared to other adblocking methods it's fast and does not use a lot of memory, but it's limited in what it can block (namely connections to specified hostnames).

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