“weaving in and out of the moonsponge”
“unless the moonsponge has a second hatching, and that would just be stupid.“
My guess is that it's porous and filled with tubes, based on bogleech's imagery and "Gramps's" appearance.
It also seems to be the egg of something, as it is mentioned "hatching." Gramps seems to be preparing for this by swapping Gels. Perhaps Lifegel is needed to help it hatch a second time?
All around I think the moonsponge is fucking neat.