Dialogue from the episode:
Granny Smith: You want to know why Holder's Boulder's so danged important? [exhales] Well, now their great-great-great-great-great-great-grandfather Holder Cobblestone – he found that boulder in a dragon's nest, older than time itself! He built the family farm around it, even though it was just an ordinary rock. It always brought them good luck.
Theory: If a dragon egg goes for too long without being hatched, it turns into a regular rock. Also their hearts are made out of crystal.
They're a rock based species.