Perlite is made from volcanic rock that has been heated to about 700° C until the material expands, similar to the production of LECA mentioned. During the heating process, perlite becomes very porous making it a good material to “lighten up” or increase aeration of potting mixes.
Perlite’s high porosity means that is can hold 3-4 times its weight in water and provides excellent aeration which increases available oxygen to plant roots.
The lightweight nature of the volcanic rock used to make perlite means that it floats in water which can clog drains and pumps. Perlite has almost no cation exchange capacity so it cannot hold nutrients in reserve. The relatively brittle nature of perlite’s composition creates dust from shipping and handling that must be rinsed prior to use. Most perlite comes from mines in Turkey making it a less than sustainable product than materials that are locally sourced.