From the intro to the lesson (and modified to suit this color):
When used to describe a neuter gender noun such as "blod" the adjective is suffixed with -t and becomes "blåt".
Take a look at this discussion thread to see some examples of Danish common gender and neuter gender words.
You can only see the intro on the website, not in the app. I love duolingo but this fact is easily the worst thing about it.
blå is used when it's common gender. You can identify the common gender of a noun by its article "en": en bil, en bror, en fugl. When you want to say that the bird is blue, you say "en blå fugl".
blåt is used when the noun is not the conmon gender, but a singular neuter. You can indicate that from the article "et": et dyr, et jordbær. When you want to say that the animal is blue, you say "et blåt dyr".
Now we have "en blå fugl" and "et blåt dyr". These are indefinite and singular forms.
There are also plural and definite forms. Definite means, it is not "a bird" but "the bird". For the plural and definite forms you use "blå". E.g. "den blå bil" (the blue car).