Board Thread:Naruto Discussions/@comment-24120130-20140607191120/@comment-1872728-20140612175250

Let's call the third eye Shinju Eye. The Shinju Eye is the final evolution of the Dojutsu chain. This explains why Kaguya had the power of both Sharingan and Rinnegan. Shinju had the eye, and when Kaguya ate the fruit, they had the same power, so same eye. Kaguya then gave birth to Hamura and Hagoromo, with Hamura maybe getting the Byakugan and Hagoromo getting a devolved Shinju Eye, Rinnegan. The reason that the Rinnegan is grey and not red is because the previous eye was manifested on the mother, not the father. Hagoromo then had two sons, Indra and Asura, and Indra got a more devolved eye, Mangekyo Sharingan and Sharingan. This time is red, due to the previous eye being on the father. This explains why Sasuke have the Shinju Eye in his left eye socket, since his eye evolved due to the chakra of Hagoromo. Also, Shinju and Kaguya had a 9 tomoe Shinju Eye, while Sasuke had a 6 tomoe Shinju Eye, since Hagoromo didn't have the Shinju's chakra, so the eye didn't manifest to the full version.

The reason that Kaguya and Madara having the Shinju Eye on the forehead and not in normal eye socket is because they both used a shortcut way to achieve the eye. When Madara became Shinju's Jinchuriki, his Shinju Eye didn't manifest, which means that Kaguya didn't get the Shinju's Eye either by eating the fruit, since the fruit had most of the Shinju's chakra, which is the equivalent to being the Jinchuriki. This also explains why Kaguya is stronger than Shinju. Kaguya and Madara both used Infinite Tsukuyomi, which is related to the moon, and how Madara got his Shinju Eye is to approach the moon, so we can assume that Kaguya got her eye like that as well, due to the Shinju's chakra inside both of them reacting to the Shinju's chakra on the moon.

The normal way to evolve the Rinnegan is similar to how the Sharingan evolved into the Mangekyo Sharingan.