Sleeping Eye

The Sleeping Eye is created when a Summoning Eye is placed in the portal located at the Dragon's Nest. This is merely a placeholder for the eye and can be withdrawn when right clicked (one every 15 seconds).

Besides this, they serve no other in-game purpose whatsoever.

When an eye is withdrawn, it is replaced by a Summoning Eye and the portal loses one placed eye. Eyes can only be withdrawn every 15 seconds.

They disappear when a Dragon is spawned after placing 8 Summoning Eyes, instead being replaced with a Remnant of the Eye.

However, on unique and rare occasions, this item will bug and stay in the inventory without returning the Summoning Eye. The item can then be sold on the auction. This behavior can be replicated by putting a sleeping eye in a backpack or in the Ender Chest. Leaving the end it will not replace and it can taken out of a backpack.

Note: The summoning eye will be lost as it is not replaced.

Trivia

 * There is a typo in the item's actual lore in the first line: "Keep this item is in your..."
 * The head's texture is based on an enderman spawn egg.