“A medallion. It's like a compass. When the three holes match up, the medallion will reveal where the temple is hidden.”
The Medallion is a compass used to find the Temple of Light.
History
Island of Darkness
Wu handed Dr. Julien the medallion and Dr. Julien claimed it was the compass to find the Temple of Light. Later, Jay started playing with it and spotting trees until he accidentally found where the Temple of Light was hidden. When the three holes align with the mountain peaks, it shows the bearer where the Temple of Light is located.