The Direwood Knot seems to be an item of tremendous power. It was found inside The Gazing Giant and was an item of interest to an old Hag that lived within the ancient observatory. Upon revealing the gem to Lyanos of The Protectors, it was confirmed that this gem contained unexplained power.
The gem was said to yield very strong anti-fey power and was the reason the elves of Zeemot were repelled from The Gazing Giant for so long. The item’s creator is uncertain, but it has been said by some of the greatest of mages of the City that gems with this repulsion magnitude can only be carved by an enemy of the entire race. An enemy with so much hate in his heart for the race that no moral man could possibly contain the rage and hatred imbued into such an object.
One wonders how exactly The Watchers were going to use and implement such a dangerous item and why it was inside the observatory in the first place?