Bikini
Bikini Bottom is cannonically located under Bikini Atoll.
Bikini Atoll happens to be the place the US did their nuclear weapon tests during the cold war.
Thus it's basically confirmed that most of Spongebob's friends are all just mutated sealife and he himself a mutated conscient household cleaning sponge.
Fyi: It is indeed possible to bring an object to life, however definitely not without the sacrifice of an exorbitant amount of life.