2How to craft it
Bottlewhat it is actually for
Do not drink it expecting damage. The ring barely scratches anything you would be fighting by the time you can brew it. Its real job is projectile cleanup: enemy shots that can be destroyed die the moment they drift into the ring, which quietly deletes whole attack patterns. Duke Fishron's bubbles and Plantera's spores both stop mattering while it is up.
before you commit to it
The ingredients are gated behind lava fishing, so you need the Hotline hook, the lavaproof bobber, or a stock of critters pulled out of lava first. That is a real detour, and better planned for than discovered halfway through a brewing session.
Anything immune to the burn is also immune to the ring, damage included, so it does nothing at all to the fire-themed enemies you might expect it to punish.