Rainbow Obsidian is a type of volcanic glass that forms during volcanic eruptions. This type of Obsidian’s iridescence is caused by tiny inclusions of magnetite, which refracts light in different directions. Volcanic glass is able to produce a much finer blade than conventional steel, but are fragile in comparison. In fact, Obsidian is the inspiration for Dragonglass in GRR Martin’s Game of Thrones series.