Hot Sludge is a lava-like sludge in Where's My Perry?.
If it goes into water, it will turn into steam. If it goes into any gnome, it will be destroyed, making a splatting noise. If it goes into Perry's pipe, it will be heated, causing the level to be failed. Therefore, you must restart the level. If it goes into Sludge, it will turn into Hot Sludge, which means fire mixes with oil in real life.