Formation Coral is a type of coral REEF that is formed in shallow, warm waters. It is composed of two distinct structures: a REEF and an ATOLL. A REEF is a large, underwater structure made up of calcium carbonate secreted by corals. An ATOLL is a ring-shaped coral island that surrounds a lagoon. Formation Coral is an important part of the marine ecosystem, providing habitat for many species of fish and other marine life.