Mishna Berura Source Sheet 160:10

(י) נוטלים ידים בכל דבר שתחלתו מן המים כגון יבחושים (פי' תולעים) אדומים או שומן דג (ונראה דוקא אם רסקן דלא עדיף משלג וכו'):

Introduction:

This seif talks about the validity of things that come from water although they are not water themselves. Because they are directly created from water, they have the status of water itself. The seif discusses two such water-based creations:

1. (Moist) Red gnats

2. Vitreous Humor of Fish Eyes

1. (Moist) Red gnats

...אלא למעוטי יבחושין אדומין אפילו בעינייהו נמי דהא תניא רשב"ג אומר כל שתחילת ברייתו מן המים מטבילין בו.

Rather, say that it means to exclude red gnats that originate and grow in water. This, too, is difficult, as even by themselves they may constitute the entire measure of the ritual bath, not only to complete a deficient measure of water; as it is taught in a baraita: Rabban Shimon ben Gamliel says: With regard to anything that originates in the water, one may immerse in it, since it is considered as though it were water.

Red gnats (aka fruit flies) have stout bodies and red eyes.

The reason these red gnats are okay for netilas yadayim is because they are created directly from the water itself, and following a Talmudic principle, this gives them the halachic status of water itself.

And the halachic validity of red gnats as water goes beyond just that. Not only are they water, but they are deemed as if it is pure, pristine water without any problems at all, and the reason is because although it may look different than standard water, this is how this "water" was made for its inception.

2 major nafka minas come out from this fact:

1. Even though this water is red - it is not a problem of shinui mareh, because its not a "shinui." (M.B.)

2. Even though this water is somewhat of an aberration of standard water, it is not a problem of nishntanu machmas atzman, since it wasn't nishtaneh, rather it was always this way. (Shaar Tzion)

3. Even though this water is not fit for a dog 🐶 to drink, since this is how it was made from its inception and is not like this because it has "spoiled", it doesn't matter that a dog can't drink it. (Shaar Tzion)

The validity to wash with red gnats is qualified by Hagaos Ashri to be limited to when they still contain some bodily moisture. But if they are totally dried out, the netilas yadayim would be invalid.

(Additionally, one needs to grind them up, as the Rema says at the end of the seif. See M.B. who brings from the Magen Avraham that this must be the case in order to avoid a stira in Shulchan Aruch.

(יז) או שום ד"א. משמע שבא לכלול אפי' דבר שהוא מבריאת המים דלא כרשב"ג אבל בסי' ק"ס ס"י משמע דהלכה כרשב"ג (ב"י) ובי"ד סי' ר"א סנ"ב פסק דאע"ג שמטבילין בו מ"מ ממעט בשפופר' הנוד ע"כ והתי"ט חלק עליו וכ' דלהרא"ש והטור אין מטבילין בו ואין נוטלין בו וממעט וגם טמא אם נמצא על היד ע"ש פ"ו דמקואות

וליישב דעת הרב"י צ"ל דהא דמטבילין ביבחושין דוקא אם ריסקן דלא עדיף משלג ואפי' למאן דפליג בשלג מודה בהא דאם לא ריסקן לא מקרי טבילה כלל ולכן אם לא ריסקן ממעטין ואפשר דמטמאין היד ג"כ וה"ה שלג וברד כשלא ריסקן ונמצאין על היד דטמא וכן יש להורות:

2. Vitreous Humor of Fish Eyes

...אלא למעוטי יבחושין אדומין אפילו בעינייהו נמי...ואמר רב יצחק בר אבדימי מטבילין בעינו של דג.

...Rather, say that it means to exclude red gnats that originate and grow in water. This, too, is difficult, as even by themselves they may constitute the entire measure of the ritual bath... And Rav Yitzḥak bar Avdimi says: One may immerse even in liquefied fish eye of sufficient volume.

בעינו של דג - דג גדול שנימוק שומן עינו בחורו:

The eye of a big fish whose jelly of the eye has dissolved into the socket:

Chazon Ish illustrates this as a person climbing into the eye of an enormous fish laying sideways on the ground, and jumping into the liquid of the dissolved eye.

(Look at the little figurine in the fishes eye in the picture below)