An analysis completed by Doctor Julian Bashir on the locket in 2369, the "stone" portion contained "an amalgam of organic material and some sort of crystal." This "more or less" gave the stone properties of life, existing in an almost "transitional stage between organic and inorganic matter," informing Odo that "in a way, this stone might qualify as a distant cousin of yours."
According to the Rakhari Croden, who introduced the item to Odo, merchants on Rakhar bought these type of stones from "off-world traders," and he did not know their true origin. They were primarily used as a type of key that could access, among other things, a stasis chamber. Upon using this "stone", as he called it, to release his daughter Yareth from the stasis chamber where she was being kept, he gave it to Odo (DS9: "Vortex")