Boss Idea

[Boneshrimp]

Sea Sinkhole

A wide object to be found in deep ocean, Sea Sinkholes are caused by nightmare fuel ascending from the ruins deep below, You can dump your sanity in it to become a "bait", Once the bait gets full sanity it will summon a boss called Frilled Depths, Although there is only 1 of these per world it has a gigantic sanity aura and the water near it has harmless nightmares, Frilled Depths may take time to appear depending on the distance as it will seek the Bait no matter where they are, If the Bait is underground the boss will wait for the Bait until they appear

Frilled Depths
HP: 17,500
Loot: 6x Thulecite, 13x Nightmare Fuel, 6x Fish Meat and 1x Nightmare Gills

Behavior: This nightmare fuel-packed frilled shark will seek the Bait until it reaches them, It can attack while moving to deal 75 damage and turn around to attack again, It can also summon a nightmare geyser that deals 25x3 damage to players inside it and send arc-like shots at random  that deal 30 damage each, At 5,000 hp the Frilled Depths will dive into the ground/water and 3 waves of nightmares will begin attacking, Once the 3 waves are cleared the boss returns

Wave 1: 2x terrorbeaks 2x Crawling Horror, 1x Globfish

Globfish
HP: 500
Loot: 1x Fish Meat, 1x Nightmare Fuel

Behavior: Leaps directly above the player dealing 30 damage and produces slowing slime that slows the player by 10%

Wave 2: 1x Terrorbeak 2x Crawling Horror, 2x Globfishes and 1x Slugshot

Slugshot
HP: 750
Loot: 2x Slurtle Slime and 1x Nightmare Fuel

Behavior: Slugshots will keep their distance and load nightmare fuel between their eyes to sling it towards the player dealing AoE 25 damage

Wave 3: 3x Terrorbeaks, 2x Globfishes and 2x Slugshots

(Keep in mind that you can fight them in land)

Frilled Mask
Crafting: 1x Nightmare Gills and 5x Silk
Durability: 200 uses
Perks: Allows the player to eat Nightmare Fuel to regain 10 hunger and health at the cost of 10 sanity