Perlite is a form of volcanic glass (like obsidian, but full of bubbles). It's formed from volcanic lava that literally solidifies as a glass foam. In soils it is used primarily to keep the other components from compacting, and it also traps air and water, so it's good for aeration and keeping water and nutes from draining straight. It's essentially a filler. Totally inert. I personally feel that many potting soils use way too much of it. Probably at the expense of more valuable components. Foxfarm's Ocean Forest has a very nice ratio.