Microorganisms called Sky Coral attached themselves to Moon Stone boulders and grow to form these reefs. They flourish only in very specific conditions, and can take 200 years to grow. Their various colors and shapes have long been valued for their beauty.
Return to the area north of Pirate's Isle, near Shrine Island. Head east from Shrine Island, through the stone reef. Travel down the corridor formed by the two sky rifts to the end of the long rocky island. You will find a small cluster of closely packed isles in an unusual configuration, the sky coral is found on this pack of green isles. This discovery can only be found after the Little Jack is equipped with the Harpoon Cannon, allowing the ship to punch through stone reefs.