The setup was created by Mārtiņš Upītis and was inspired by the technique showcased by Alex "HotdogNugget" Heskett.
With Blender 3.6 LTS now available in beta, more and more artists are starting to experiment with the upcoming release's most notable new feature – Simulation Nodes, an upcoming framework for setting up particle-based simulations.
One such experiment has recently been showcased by Tech Artist and the Co-Founder of Physical Addons Mārtiņš Upītis, who demonstrated how the new nodes can be utilized to set up highly-realistic digital water directly in Blender.
Using the nodes in question, the author managed to create a stunning water and water ripples simulation, with object interactions being driven with the Mesh Proximity node and the wave generation method consisting of "blur, subtract, swap buffer, and repeat". According to Mārtiņš, the setup was inspired by a technique demonstrated by CG Generalist and Digital Artist Alex "HotdogNugget" Heskett a few days prior.
And here's HotdogNugget's water simulation Mārtiņš was inspired by:
In the future, the creator plans to further extend and improve the setup, so we highly recommend following Mārtiņš on Twitter so as not to miss any updates.