Some of my all-time favorite fish are fish in the genus Caracanthus. There are four species in this genus, though only two are common in the pet trade -- Caracanthus maculatus from the Indo Pacific and Caracanthus madagascariensis from Africa. I've heard a few cases of a Caracanthus typicus from Hawaii in a pet shop, but I haven't yet heard of a Caracanthus unipinna for sale (but I found one as a hitchhiker!). Some common names used are Velvetfish, Velvet Goby, or Gumdrop Coral Croucher. These fish are often called gobies, but belong to the order Scorpaeniformes like scorpionfish and waspfish. The specimens from Africa seem to be the most colorful, having pink bodies and red spots to resemble the Pocilloporid corals they inhabit.
These tiny fish only grow to about 2.5 inches max. They are clumsy swimmers and prefer to perch or squeeze themselves into tight spaces, holding on with their thick pectoral fins. Velvetfish have vertically flattened bodies so that they can squeeze into the branches of Pocillopora, Stylophora, Acropora, and similar corals. If you have large, healthy colonies of these corals in your aquarium, they shouldn't be harmed by the activities of these fish. If you keep a breeding pair, however, you may notice some tissue loss on the underside of a coral where the Velvetfish lay their eggs.
Velvetfish are venomous, so use caution when cleaning their tank. As long as you don't pick one up and squeeze it, you shouldn't get stung. The sting isn't nearly as bad as their scorpionfish relatives and feels a lot like a bee sting. If you do get stung, immediately run hot water (as hot as you can stand) over the affected area.
Velvetfish can be aggressive toward their own kind, so they are best kept singly unless you find an established pair for sale. Otherwise, they are extremely docile toward other fish. I kept my Velvetfish in a 55 gallon aquarium with many tiny gobies such as Trimma, Eviota, and clown gobies. My Velvetfish never showed aggression or interest in consuming any of my tiny gobies.
When choosing a Velvetfish for the first time, make sure to choose a fish that is not too skinny. Their bellies should be rounded and not concave. The head and dorsal area should also be full and not sunken in. Ask the pet shop to feed the fish in front of you so you are sure it is eating frozen foods. If the fish only eats live food, it might be interested in frozen food, but may only look like it's eating. So be very observant and make sure the fish actually consumes the frozen food. It takes a lot of preparation to keep a Velvetfish who only eats live shrimp and has not been trained to eat frozen food.
It can be difficult to feed these fish, especially in a larger aquarium where they have a lot of places to hide. They normally will only eat food that falls within an inch of their face, so target feeding is required.
I would recommend keeping a new Velvetfish l in a small, bare bottomed quarantine tank with one or two branching decorations for the fish to hide in. Then target feed the fish frozen food like Mysis with a syringe. There is a good chance the fish may not take to frozen food right away, even if it was eating it in the store. In this case you'll have to buy small feeder shrimps until the fish learns to eat frozen food. Freshwater ghost shrimps that have been enriched with vitamins and gut-loaded make a good live food.
Velvetfish are considered cryptic fish and tend to hide almost constantly, especially at first. Once they become comfortable in an aquarium, they can become quite tame. My Velvetfish was not afraid of me and would actually watch me and follow me as I moved around the tank. He ate directly from the tip of the feeding syringe and would even swim to it if it wasn't nearby. I find Velvetfish to be fascinating, beautiful little gems that can safely be kept in a small reef aquarium. If a non-reefer friend points out that your new Velvetfish is not very active and a little "boring," you could always impress them with, "Hey, it's venomous."