As coral polyps are animals, soft coral takes in zooplankton -- a type of small algae -- that live inside the coral polyps as food. Coral polyps also catch zooplankton that float in the water surrounding coral reefs. The algae that live inside the coral itself is the organism that creates the oxygen in the water that other marine animals need to survive.
Photosynthesis is the essential process in which plants -- both marine and otherwise -- take in sunlight and expel oxygen. In the photosynthesis equation, 6CO2 + 6H2O + Energy produces C6H12O6 + 6O2. Marine plants take in the carbon dioxide emitted by animals as well as energy from the sun and water from the surrounding environment and put oxygen back into the water for animals such as coral to breathe in. The zooplankton living inside the coral execute this process, providing oxygen that the coral takes in.
Since the zooplankton living in the coral polyps provide the reef's oxygen, coral must grow only in shallow and clear water. Very little sunlight reaches the depths of oceans, and therefore coral must live in shallow water so its symbiants may take in sunlight for oxygen production. Coral needs to live in clear water for the same reason. Eutrophication is the process through which the surface of a body of water is covered in algae or plankton to the point that no sunlight gets through. If this happens, everything in that body of water dies.
Coral must live in warm water to survive; temperatures between 60 and 90 degrees Fahrenheit are ideal. Coral also needs to live in saltwater in order to survive, as it must maintain a perfect saltwater balance in its cells. For that reason, coral is never found in freshwater. Coral also relies on fish that eat algae to keep waters clear enough to survive; those fish need oxygen levels of two to five parts per million in order to survive and keep algae from overrunning shallow tropical waters.
