While we're not exactly prepared to call this stuff water, per se, the fluid dynamics on display in the latest PhysX demonstration are quite impressive nonetheless. In fact, the viscous sloshing is so realistic that we're pretty desperate for a blue-coconut slushie at this point, though preferably one that hasn't washed upon the thighs of a weird humanoid muskrat creature.
This video, as well as the two tucked after the break, were produced to demonstrate the principles outlined in a "Position Based Fluids," a paper recently published by Nvidia employees Miles Macklin and Matthias Muller. In laymen's terms, the duo have devised a less system-intensive way to render "incompressible" liquids, which is the key to ensuring realistic goo.
The document contains numerous formulas and is very concerned with concepts like "tensile instability" and "vorticity conﬁnement and viscosity," but it also features a lot of bunny rabbits, which helped our comprehension levels a great deal.