Mahayana Buddhism received significant theoretical grounding from Nagarjuna (perhaps c. 150–250 CE), arguably the most influential scholar within the Mahayana tradition. Nagarjuna's primary contribution to Buddhist philosophy was the systematic exposition of the concept of śūnyatā, or "emptiness", widely attested in the Prajñāpāramitā sutras that emerged in his era. The concept of emptiness brings together other key Buddhist doctrines, particularly anatta and dependent origination, to refute the metaphysics of Sarvastivada and Sautrantika (extinct non-Mahayana schools). For Nagarjuna, it is not merely sentient beings that are empty of ātman; all phenomena (dharmas) are without any svabhava (literally "own-nature" or "self-nature"), and thus without any underlying essence; they are "empty" of being independent; thus the heterodox theories of svabhava circulating at the time were refuted on the basis of the doctrines of early Buddhism. Nagarjuna's school of thought is known as the Mādhyamaka. Some of the writings attributed to Nagarjuna made explicit references to Mahayana texts, but his philosophy was argued within the parameters set out by the agamas. He may have arrived at his positions from a desire to achieve a consistent exegesis of the Buddha's doctrine as recorded in the Canon. In the eyes of Nagarjuna the Buddha was not merely a forerunner, but the very founder of the Mādhyamaka system.

Nagarjuna's main contribution was the exposition of the concept of what?