The knife appears to be a method to permanently kill a Herald, rather than simply returning them to Braize as a "conventional" death would. Jezrien, while initially in a drunken stupor, quickly realizes that something about this death is different and claims to feel the knife drawing something from him into itself. Likewise Shalash instantly distinguishes it from previous deaths as she could no longer sense his soul. This process operates under similar principles to the Scadrian manifestation of Investiture known as Hemalurgy, where practitioners are able to steal part of an individual's spiritweb using metal spikes. It is a matter of debate among cosmere philosophers whether this is in fact Hemalurgy or rather a related, but distinct, phenomenon.
Following Jezrien's death, the sapphire set into the knife takes on a "subdued glow". The knife, when removed, trails a black smoke and leaves behind a blackened wound.
It has been theorized that the knife is made of Odium's god metal, citing its golden/yellow-ish white color and the fact that Odium often manifests as a figure in gold and white and his power is often perceived as a golden light.
The knife may share some relation to Nightblood, which is also known to cause blackened wounds and leaks a black smoke.