Shimmer has the unique function of transforming ('transmuting') certain dropped items and entities submerged in it: After Moon Lord has been defeated, it can be obtained by using the Bottomless Shimmer Bucket.
Before Moon Lord has been defeated, a limited amount of Shimmer can be found in the Aether, a mini-biome which generates once per world in the Underground or Cavern layer, always on the same half of the world as the Jungle. Shimmer is a shiny, lavender-colored, pearlescent liquid. For the debuff inflicted by Shimmer, see Shimmering.