Ghost Blades were weapons wielded by Morro when he was in control of Lloyd's body. After confronting his old master and clashing with his pupils, Morro pursued his adversaries as they made their escape on Destiny's Bounty 2.0. He continued his attack on the ship, brandishing the two blades as the battle picked up again. Sometime later, Morro would stop using these blades for weapons, likely in favor of wielding a stronger one.
Wrayth's chained whip does feature a single ghost blade at the end of the chain, which is part of the weapon. He would utilize this as his primary weapon after being freed from the Cursed Realm. All the ghost blades were presumably lost upon the Cursed Realm's destruction. Ghost Ninja Ming and Cowler also use one.
They appear to have the power to transform others into ghosts, as Wrayth‘s ghost blade turned Cole's Walloper into a ghost.