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Lichens are a rare symbiosis of fungi and algae. If you are looking for them, they can be found scattered around various places on land, especially near seashores. They are also sometimes dropped by Ghouls. These should be picked up when found as they are rare.

Lichens can be used to craft the following items:

They are also used to upgrade Kingdom Airships.

Note that Lichen cannot be uprooted or planted, and when you pick it up from the ground, there is no plant remaining to harvest from again later. It may respawn again, or it may not.