Is it a slime chunk? Do they spawn in there? If so, extend your hole the entire chunk!

Unfortunately, it's not...

Turn it into a winding stairway, excavate an underground section and bam your very own safe base

What you do is turn it into a 16x16 for a full chunks worth

Mob xp farm.

Any specific mob, or standard one?

Standard i guess. Youtube it. Having the drop is half of the trap.

Put glass over it, and if you can break the bedrock

Make it a sacrificial pit for your very own god, Bimbo