The Depth Meter is an accessory that gives you information on your vertical position and vertical biome. It's dropped by a number of enemies in the Underground and Cavern layers and can be used to eventually craft the Cell Phone.
The Depth Meter is dropped by various enemies underground, all of which have about a one percent chance of dropping it. It’s dropped by:
The Depth Meter is an accessory, however, it functions both in the inventory and in an accessory slot. It displays information beneath the minimap about your current height as well as identifies height related biomes such as Space, Surface, Underground, Cavern, and Underworld.
The Depth Meter can be upgraded by combining it with a Compass and a Gold or Platinum Watch at a Tinkerer’s workshop. This newly crafted GPS will display your depth information, as well as the time and your horizontal position. It is also one of the items used to craft the PDA which can then be crafted into the Cell Phone.
The Depth Meter is an informational accessory which displays your vertical position as well as biomes based on that vertical position, like Space and Underground. It drops from Cavern and Underground enemies, mostly bats. It's also used to craft the GPS as well as eventually the Cell Phone.
Before you have the Depth Meter, it can be hard to tell your vertical biomes apart, especially Underground and Cavern. However, the best way to tell is by the background. The Cavern Layer tends to have a very rocky background while the Underground’s background appears to contain more dirt.
While the rarer enemies like Giant Shellys, Crawdads, and Salamanders have a slightly higher chance to drop it than bats do, they spawn so rarely that it barely makes a difference. Definitely go for killing as many bats as possible to get the Depth Meter quickly.