Soulstones are objects enchanted via necromancy to become a vessel containing the soul of a living creature.
Most soulstones are, as one might expect, stones. Crystal gemstones and volcanic rocks are preferred, as those seem to be capable of holding more powerful - or a greater quantity of - souls. However, almost any nonliving object can be enchanted to serve as a soulstone - everything from a candlestick to a sword.
The soulstone is usually created by the etching of a rune or runes onto the object's surface. A necromancer then uses a soul capturing spell to ensnare the spirit of a recently-slain victim, trapping it within the stone. Multiple souls can be trapped within the same stone, depending on the quality of the soulstone and the power of the soul being trapped. Attempting to trap the soul of a powerful creature such as a dragon in an inferior-quality object will result in the object being destroyed in a violent explosion of magic.
Once the soulstone is filled, it can be used in a variety of ways. Non-Gifted necromancers often use these trapped souls instead of their own to power their demonic magic. By giving pieces of the trapped souls to the demons who grant them their power, they can avoid having their own souls diminished when they cast demonic spells.
Even a necromancer whose natural magical Gift allows them to use demonic magic without sacrificing their soul may find uses for a soulstone. A necromancer who traps his own soul in such an object can avoid death itself by becoming a form of undead called a Lich. A necromancer can also use the souls in a soulstone to create undead abominations, including so-called "necrogolems" - towering monstrosities of sewn-together flesh powered by a soulstone.
While some necromancers ward their soulstones against destruction using powerful spells or simply strong materials, most soulstones can be destroyed simply by smashing them. Once a soulstone is smashed, the spirits inside may escape. Sometimes they linger and wander, while other times they are drawn immediately into the afterlife - especially when a demon has been long awaiting them there, as is the case with many necromancers. Either way, any spell powered by the stone will dissipate, and any undead created with the stone will crumble.