Pixie Dust

The Pixie Dust drops from Pixies.

You can craft Holy Water with Pixie Dust, Hallowed Seeds, and Bottled Water. Pixie dust is a rather common material, always dropping from Pixies, and is also a "Base Ingredient", meaning it is used in a fair amount of recipes, much like Iron pre-1.1. It is also one of the ingredients for Greater Health Potions, so it is an item you will be farming quite a bit.