Its existence is first hypothesized by Mona, who herself expresses uncertainty if it is whether or not possible to create, even with all Cipher Coins. The airheaded Percy however, prefers to throw caution out of the window and try the experiment nonetheless, which unexpectedly succeed.
Unsure of its use, Plague Knight show the Chalice to the Troupple King, who is elated to see it as he thought they had all been lost long ago. He then gives Plague Knight the powerful but unstable Pandemonium Cloak as a reward.
In the gear screen the Pandemonium Chalice replaces the Troupple Chalice. If Plague Knight never obtained the Troupple Chalice, the Pandemonium Chalice allows him to meet the Troupple King. The save file will also show that Plague Knight owns the Troupple Chalice even though it can still be bought from the Troupple Acolyte. Lastly even if he never obtained a Troupple Chalice, Plague Knight still holds one aloft when being covered with Ichor.