Shred it. It's to change the colours of the accents on the new armour. The armour drops at light level 3 and you have to infuse it.
To catch up just do nightfall and stuff, make sure you have your highest light level gear on when you hand in engrams. PVP also seems to be good for loot lately, dunno if they buffed it or whatever. I'll probably hop on later for some crucible, I played a game with Chris and DaveyDave last night and wrecked, 26 kills and 7 caps, was great fun. I forgot how much I love regular PVP because light levels mean jack shit so my shoulder charge always works whereas in banana id someone is 1 level higher than me I can forget it.
Enough rambling, I'll see you on later probably.