Is this a sponge and is it good or bad?

[NedFlounders]

At the base of the frag, you can see the gray substance that has started to grow. Is this good or bad?

 

[Dkuhlmann]

Yep, looks like sponge to me. I've got tons of it in my DT and in my sump. Sponges are harmless filter feeders... HOWEVER they can grow over and consume your frags. So in this case I'd remove as much as you can off of the frag.

 

[NedFlounders]

Excellent. Thanks!

 

[mcgyvr]

sponge.... with any luck it kills that frag before it takes over your tank..