The Space Butterfly (may its wings flap eternally as it dreams the world) is a fictional (?) deity created by Jesse Cox, during a boredom-fueled stupor while filming the Terraria series with Totalbiscuit.
The myth states that reality itself is no more than the dream of a gigantic Space Butterfly, that roams through the stars and eats moon nectar, creating and dictating all that occurs. He has sometimes been matched against the Space Moth. Jesse himself is the self-proclaimed Prophet of the Space Butterfly, a title the fans use when adoringly referring to him.
Initially no more than a passing joke, it was created during the second Terraria series in Episode 10. Not much was thought about it immediately, being just used as a way to burn time, Jesse later complaining about having to spend six minutes talking about a fake space butterfly.
Little did he know, it'd quickly become one of many memes born out of this series, along with DJ Jazzy Worm Jeff and Frankenstein Joe. But it didn't stop there, for its fame quickly increased, often being referred to by Jesse himself and by his fanbase.
With time, and reminiscent to TotalBiscuit's "Cynical Fleet", the whole fanbase started referring to itself as the Space Butterfly army, calling Jesse the Prophet, and (mostly jokingly) adoring it as a new religion. Jesse in ocassions has called his fans his "space butterflies".
Given it's sudden rise in popularity, the SB became part of the OMFGcata brand, with Jesse making several items of merchandise inspired on it. Found here, the T-Shirts and posters were sold out within days, and currently there are "holo postcards" for sale, all with the design of a galaxy shaped like a butterfly. Jesse's logo when represented by TGS and in some of his thumbnails is a flower shaped like a moon. Of course, fan-art was from then on heavily inspired on the deity, with many pictures and gifts referring to it in some form.
The reference didn't stop within the fanbase. Because of his collaboration with certain indie game-developing companies, Jesse was rewarded with a cameo in some games, one of which was Awesomenauts, a 2D MOBA-style game. Jesse was given a character of his own, Genji, the Pollen Prophet. It is, of course, based on the Space Butterfly, and is basically an alien priest, formerly a member of a cult dedicated to the worship of the SB.ALL HAIL THE GREAT AND ALMIGHTY SPACE BUTTERFLY.... BE FREE