"Powder Game"[1] is the Flash game off the top of my head that fits your description. If you're looking for a more fleshed out version with many times more elements/interactions, check out "The Powder Toy"[2]!

[1] https://dan-ball.jp/en/javagame/dust/

[2] https://powdertoy.co.uk/

So many hours spent in these games :) Building distillation systems was way too fun!

Definitely a gateway drug to the sandbox/simulation genre for me (Minecraft, Rimworld, Factorio).

Countless hours spent blowing up pixel cities, tinkering with the particle interactions, trying to make a sustainable nuclear reactor... fun times indeed.

Tnx for those games.