How to craft it
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Near lava
Sky Millbuilding with it
It lights itself, which is the main reason to use it indoors. A ceiling or a feature wall made of these needs no torches and no wiring behind it. The drips it throws off are pure decoration and will not burn anything standing underneath, though they do carry a little light down with them, which is enough to give a room a slow flicker without you doing anything.
where you find it
It takes the place of rain clouds on the floating islands that generate down in the underworld, which is a situation you will realistically only meet on a remix world. In a normal world there is no natural supply, so if you want the block for a build you are going into a specially seeded world to get it.