Probably something to progress as someone already mentioned the crafting station, although might be used to create elemental weapons or whatnot as Yagluth has fire and lightning attacks and i'm pretty sure he drops multiple Yagluth "things". So, probably used in a similar fashion as the dragon's/ moders tear is used. I still have a strong feeling some sort of enchantments or whatnot will be added in some form.

But i hope it's also used to make unique weapons/armour in combination with ymir's flesh.