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Formation and characteristics copied from Agate Wikipedia article
Most agates occur as nodules in volcanic rocks or ancient lavas, in former cavities produced by volatiles in the original molten mass, which were then filled, wholly or partially, by siliceous matter deposited in regular layers upon the walls. Agate has also been known to fill veins or cracks in volcanic or altered rock underlain by granitic intrusive masses. Such agates, when cut transversely, exhibit a succession of parallel lines, often of extreme tenuity, giving a banded appearance to the section. Such stones are known as banded agate, riband agate and striped agate.

In the formation of an ordinary agate, it is probable that waters containing silica in solution—derived, perhaps, from the decomposition of some of the silicates in the lava itself—percolated through the rock and deposited a siliceous gel in the interior of the vesicles. Variations in the character of the solution or in the conditions of deposition may cause a corresponding variation in the successive layers, so that bands of chalcedony often alternate with layers of crystalline quartz. Several vapour-vesicles may unite while the rock is still viscous, and thus form a large cavity which may become the home of an agate of exceptional size; thus a Brazilian geode lined with amethyst and weighing 35 tons was exhibited at the Düsseldorf Exhibition of 1902. Perhaps the most comprehensive review of agate chemistry is a recent text by Moxon cited below.

The first deposit on the wall of a cavity, forming the "skin" of the agate, is generally a dark greenish mineral substance, like celadonite, delessite or "green earth", which are rich in iron probably derived from the decomposition of the augite in the enclosing volcanic rock. This green silicate may give rise by alteration to a brown iron oxide (limonite), producing a rusty appearance on the outside of the agate-nodule. The outer surface of an agate, freed from its matrix, is often pitted and rough, apparently in consequence of the removal of the original coating. The first layer spread over the wall of the cavity has been called the "priming", and upon this base, zeolitic minerals may be deposited.

Many agates are hollow, since deposition has not proceeded far enough to fill the cavity, and in such cases the last deposit commonly consists of drusy quartz, sometimes amethystine, having the apices of the crystals directed towards the free space so as to form a crystal-lined cavity or geode.

When the matrix in which the agates are embedded disintegrates, they are set free. The agates are extremely resistant to weathering and remain as nodules in the soil, or are deposited as gravel in streams and along shorelines.

Agates can also be found in sedimentary rocks. They need a cavity to form, so they are typically seen in limestone, dolomite, and shale which may have shells, tree branches, or roots in them that later decay away. With the void created, silica-rich fluids can enter the cavity and precipitate chalcedony in curved bands forming agates. Other quartz classes like amethyst or opal may then form the inner-most band inside the geode.

Edited paragraphs
Agates are most commonly found as nodules within the cavities of volcanic rocks. These cavities are formed from the gases trapped within the liquid volcanic material forming vesicles (1). Cavities are then filled with silica-rich fluids from the volcanic material form agate, layers are deposited on the walls of the cavity slowly working there way inwards (2). The first layer deposited on the cavity walls is commonly known as the priming layer (3). Variations in the character of the solution or in the conditions of deposition may cause a corresponding variation in the successive layers. These variations in layers result in bands of chalcedony often alternate with layers of crystalline quartz forming banded agate (4). Hollow agates can also form due to the deposition of liquid-rich silica not penetrating deep enough to fill the cavity completely (1). From the reduced cavity within the agate will form crystals, the apex of each crystal will angle towards the center of the cavity.

The priming layer are often dark green in colouration but can be reduced by iron oxide emitting a rust like appearance (3). Agate is a very durable mineral and therefore is often seen detach from its eroding matrix, once removed, the outer surface is usually pitted and rough from filling the cavity of its former matrix. Agates have also been found in sedimentary rocks (4), normally in limestone or dolomite; these sedimentary rock require cavities often from decomposed branches or other buried organic material. If a silica-rich fluids are able to penetrate into these cavities agates can be formed.