The Y stone is a reward for beating The Developer
Strategy
Even with his enormous health pool, the Developer is relatively easy to defeat. Have 2 Turtle Potions ready, and use them when the Developer's first and second text messages are about to reach you. The third one will instantly kill you, so just before that one reaches you, nuke him with the black hole spell and defeat him. Keep in mind, though, that if you use the black hole too soon, he will kill you with his own. Likewise, if you use any magic, at any time, he will instantly wreck you.
An easy way to kill him is to equip rocket boots, hold J (if you have the pogo stick enhanced with the feather from the desert bird) or repeatedly press the jump key to fly as high as is permitted and land on his head. Use a turtle spell and cast a black demon or black hole spell, thus causing him to cast his own black hole spell on himself, instantly killing him.
The Developer gives 6 million candies, and can be farmed effectively with the Merchant's Hat increasing the reward to 42 million. Health Potions are easy to make, if you equip the Boots of Introspection and go to the spike room in the castle it's easy to spam them and heal very quickly between fights as long as you have all the passive healing items in the game.
Another strategy that may(?) work is to squeeze and use the turtle potion, use the rocket boots to fly up to the developer's head, and use obsidian wall. This only may(?) work if you have at least 1500 Health.
The developer can also be defeated quite easily with the help of the scythe, which can be obtained from the blacksmith after speaking with the Dragon inside the castle. You need the scythe, lots of health (1.5k+), a Turtle Potion, and the Rocket Boots (it helps if you have the Desert bird feather so you can hold "J" to fly). When you spawn in the room, hold the "J" key (if you have the Desert bird feather) and fly to the very top of the boss(you'll notice your scythe is DESTROYING the developers health), pop a Turtle Potion right before the boss shoots his first "text message" at you (its the blue text that says hello), the boss should run out of health before the 2nd "text message" even reaches you. Boom. Done.