Which ingredient is known as an excellent skin softener and humectant formed by fat and oil deposition?

The correct choice is lanolin. This ingredient is derived from the fat secreted by sheep's wool and is renowned for its ability to soften the skin and act as a humectant. Lanolin works by creating a barrier on the skin, which not only helps to retain moisture but also enhances the skin's overall texture. This unique characteristic makes lanolin particularly beneficial for dry or dehydrated skin types. Its composition allows it to mimic the natural oils produced by human skin, providing both moisture and a protective layer.

While glycerin and hyaluronic acid are also effective humectants, primarily drawing moisture from the environment to the skin, they do not have the same barrier properties as lanolin. Squalane, though an excellent emollient and moisturizer, is a hydrocarbon derived from olives or sugarcane, and it does not possess the same skin texture-softening capabilities provided by lanolin. Therefore, lanolin stands out as the ingredient specifically recognized for its skin-softening and humectant properties related to fat and oil deposition.