From the Super Mario Wiki
A Balloon Bully, also called Balloon Buddy, is a helpful character found in Yoshi's Story. They are large balloons, which are found in mechanical crates or Bubble Pops. Three of them are found in the game: two in stage 1-2, Surprise!!, and one in stage 6-2, Lift Castle. When Yoshi fires an egg at one, it expands into a balloon-like creature with a log on its head. Yoshi can ride them to reach otherwise inaccessible items. When Yoshi stands on this log, players can use the Control Stick to control the Balloon Bully's movement. If Yoshi leaves a Balloon Bully's lift, it remains stationary for a few seconds, then it will slowly sink to the ground.
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