Mud is quite fertile and is used to farm certain plants, such as Sugar Cane and Bullrush. Its only other use-apart from possibly making traps involving its slowing effect-is to make Mud Bricks and Mud Brick Blocks.
Mud Brick Edit
Mud Bricks are made from smelted Mud. These bricks are then combined in a crafting grid in a 2x2 shape to make Mud Brick Blocks. This process is irreversible.
Mud Bricks and Mud Brick Blocks can also be used to produce Mirbrick.