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Stromatolites are domal structures formed by the fossilized remains of cyanobacteria. Most stromatolites were formed 3.5 billion years ago in precambrian times. The precambrian atmosphere was rich in carbon dioxide, but lacking in oxygen necessary to sustain more complex multicelluar life. While prokaryotic cyanobacteria themselves reproduce asexually through cell division, they were instrumental in priming the environment for the evolution of more complex eukaryotic organisms. Cyanobacteria are thought to be responsible for increasing the amount of oxygen in earth's atmosphere through photosynthesis. Using water, carbon dioxide, and sunlight to create food, the organisms secreted oxygen and calcium carbonate (lime) as biproducts. As a protection from solar radiation, a layer of gel formed over the cyanobacteria. Debris from the surrounding habitat became trapped within the gel, which combined with the excreted lime to form the banded pattern common to stromatolites. The domal morphology of stromatolites is the result of the vertical growth necessary for the continued infiltration of sunlight to the organisms for photosynthesis.
Living stromatolite systems declined sharply in both diversity and number during the Ordovician period, and are extremely uncommon in modern day. Stromatolite fossils are found mostly in hypersaline lagoons in warm climates such as that of Western Australia where excellent examples are found at Shark Bay.
Layered spherical bacterial structures similar to stromatolites are also known. They are called "oncolites".