The Coiling Dragon Ring is capable of drawing in and absorbing souls that were not bound to a body (living beings) and naturally refine them. It would then send the refined souls to its wearers soul and strengthen their soul.
The Coiling Dragon Ring in Linley's possession contained a total of four droplets, 1 gold droplet and 3 blue droplets. These 3 blue droplets later turned out to be drops of Water-type Sovereign's Might. It is later revealed by Gislason Redding that the golden droplet, in fact, was a drop of distilled blood essence of the Sovereign Azure Dragon himself.
It is later revealed that the Coiling Dragon Ring that was in Linley's possesion, in fact, belonged to the Sovereign of the Redding Clan, the true Azure Dragon.
During Linley's participation in the Planar Wars, only after he became a 4-way Soul Mutate, he managed to comepletely fix his Coiling Dragon Ring after a period of 10 years.