This led matrix uses individually addressable RGB led strips wide only 4mm and a distance between the LEDs of 16.6mm.
On top of each LED there is a square piece of clear acrylic that accommodate the LED strip and shines the light on its sides. Each pixels has its isolated square piece of acrylic and this prevents the light to diffuse to the nearby pixel.
The led strip is driven by Arduino loaded with the Glediator sketch slightly modified and driven by a Python program on the PC that i am currently developing.