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Next is the Stalactite layer, where you'll find iron. Then the lava layer, which has diamonds. Finally the corrupt layer, with diamonds and lumite. Best bet for finding obsidian is to check all the surface caves in the area. If one cave doesn't have any, move onto the next one. Eventually you'll hit a vein.
Another use of obsidian is as a stone in jewelry. Obsidian is a glasslike volcanic rock that ancient people made arrowheads and spear points from. Some of these are wonderful works of craftsmanship. It has been used to craft tools, historically.