The Laughing Dragon was an antique Chinese effigy made of Kryptonite.
The Laughing Dragon was carved in China from a green rock thought to be jade. However, the rock was in fact Kryptonite and during the subsequent thirty years, all of the Dragon's possessors died prematurely from Kryptonite poisoning. The Dragon was passed on from owner to owner, until it found its way to an Antique shop in Gotham City.
Somehow the Joker ascertained the existence and whereabouts of the Dragon, and stole it, much to the confusion of the Gotham City Police Department (as Joker allegedly had gone broke as a result of Batman stopping him numerous times, and all the other valuable items had been left untouched). He then traveled to Metropolis, and offered Lex Luthor a deal — he would use the Laughing Dragon to kill Superman for one billion dollars. He also expected the value of the statue to skyrocket in the collectors' market, once it had killed Superman.
After luring Superman into a trap, the Joker used half of the statue to subdue the Man of Steel. However, his plan went downhill when Batman intervened and dissolved the chunk of Kryptonite in hydrochloric acid. Still, the Joker had the other half-effigy.
He strapped the remainder of the statue to a colossal Wayne/Lex T-7, which he had programmed to target Superman. The remnant of the Laughing Dragon was finally shattered to pieces when Superman smashed the robot against a cliff with a giant lead door.