A mule is a character that a player uses to store less frequently used items due to the limited space in the vault box (i.e. Xunlai Chest). A mule usually has a belt pouch and two bags with Runes of Holding attached to efficiently store the inventory overflow. Mule also refers to characters that are used to transport items from one part of the game to another, most commonly from pre-Searing Ascalon to post.
Not all mules are created with the initial purpose of storing excess inventory — some are simply characters intended for normal play, but are not played often. Retired or inactive characters are often turned into storage mules.
Some players even have mule accounts — additional accounts for the sole purpose of creating characters for extra storage space.