They look exactly like normal peanuts except they are underwater peanuts.
Role in episode
SpongeBob and Patrick visit the Oyster Stadium to see Clamu the giant oyster perform tricks, only for her to turn out to be sleeping. SpongeBob throws a Sea Peanut at Clamu to wake her up, causing her to stir.
After Patrick is given no choice but to agree that he is the culprit of the incident rather than his best friend, he is taken to the Oyster Stadium, where he is chained to a platform in the middle of the stage and pelted with Sea Peanuts by the angry audience for the crime.