This is a species which belong to the Lyophyllaceae family and is found in most regions in Africa and Asia. They grow on or close to termite hills from which its common name is derived. All the species of this genus are edible and the above species is said to contain a large amount of total amino acids as well as essential amino acids. The Termite Mushroom is regularly used by many indigenous people to treat a variety of ailments across Africa and Asia.
Interestingly the reason why this species is always is found in association with termite hills is due to a unique symbiotic relationship they have established. The termites provide a protective environment for the fungus by cultivating it inside their colony and making their foraged plant material. In return the fungus helps the termites to degrade the plant-derived material such as wood, dry stems of grasses, and leaf litter etc on which they feed to obtain cellulose.
One of the most captivating sights in terms of Mushrooms in Wilpattu is to see large termite hills covered by thousands of these tiny nail head sized mushrooms. I have photographed them during the months of October to December at many locations from the park entrance to Phill Motte.