Freezing Liquid is an extremely cold liquid that very quickly evaporates into Freezing Vapour when exposed to air. It's a dangerous substance that is much more commonly seen in its gas form, Freezing Vapour, due to how quickly it evaporates.
It is especially slow to evaporate in cold areas, and can sometimes form small pools amidst the Snow or Ice in the Snowy Depths, slowly creating small columns of rising freezing vapour.
By covering Freezing Liquid with a layer of Oil, it is possible to keep it from vaporizing. If performing Alchemy with Freezing Liquid, you can first pour out some oil, then spray the freezing liquid into it. The Freezing Liquid will sink due to having higher density, then you can toss in your other ingredients without worrying that it'll burn off.
Freezing Liquid reacts with Worm Blood forming more Worm Blood.
The Iceball spell will produce Freezing Liquid when it explodes.