Spoiler Alert! We have hidden this information so that you have the choice to try it on your own, or have the advantage of knowing how the sausage is made...
Look for sparklies in the water. There is one in the center of the splash of each waterfall, and several others scattered around. The Lake Water respawns quickly and you can reuse the same spot.
You will need 10 open slots in your inventory, as the quest item does not stack.
Daily Quests are repeatable up to a total (for all Daily Quests) of 10 times per day. The count can be reset to zero by purchasing and using a Daily Quest Ticket from the Item Shop (for 39 ($1.16)† ) or from any Phirius Merchant (for 780 ).