I just purchased this Mushroom rock and when I got it home I found all of this yellow sponge type stuff growing all over the rock. I figure its just a harmless yellow sponge, but just want to make sure. I will wait to put it into the tank, leaving it in the bag.
Looks to be some type of sponge and is more than likely harmless. It may just die off because it was exposed to air but the yellow sponge that I have in my tank doesn't seem to be affected by air exposure.
Agreed with mie. I have the exact same thing and mine were exposed to air a ton of times and didn't die. Here is a picture of one of my yellow sponges.