From Lost Fables Wiki
Shimmerdust comes from large, brightly shining crystal mounds deep underground. It shatters, rather than separating from the ground in lumps like most materials, and is generally only able to be gathered as dust, thus, its name. The dust itself also glows very brightly, and tastes rather sweet, being a good substitute for sugar.
Usually, one gathers shimmerdust with a hammer or pick, by shattering the crystal veins it grows in and gathering the dust. Some people take great pains to extract whole crystals from the ground, but this is not typically worth the effort, being more of a vanity project and fetching slightly better prices.
Shimmerdust is used as a substitute for sugar in regions in which it is plentiful and sugar is not, being about equally sweet, though with a more mineraly flavor which many prefer over sugar or other sweeteners. Beyond this, shimmerdust has the curious effect of reversing the previous effects of many alchemical mixtures it is added to.