Source of Magic is part of the story quest within the Ryeham Tales storyline, occurring right after the Golden Banquet. Upon exiting the hidden passage to access Lord Franz's manor, the maid points you to the banquet location. As you get closer to the venue, you sense some strange magic.
Step-by-Step Source of Magic Guide

Go to the Banquet: Head to the banquet in Lord Franz's manor (420;166) and approach the table to start the Source of Magic story quest.

Examine the Table: Strong magic comes from the Feast Table (422;168). Examine it by ‘tap and hold' the cue button.

Get Seated: The liquid in the Feast Table is tainted with corrupted magic, but your investigation is interrupted by the upcoming banquet. Get seated (419;168) and listen to what Lord Franz has to say.

Protect Everyone: A giant Hypofiend (420;170) suddenly appeared. Defeat it to keep everyone in the banquet safe!

Battle Commence: The giant Hypofiend is a level 41 Mistal Berserker that deals AoE damage. Fortunately, it's easy to take down even in auto-battle, as long you have a decent tank at the front and a healer behind.

Talk to Rowan: Thanks to Mirael's intervention, everyone is safe from the giant Hypofiend, and many secrets have been revealed, but it's not over yet. Talk to Rowan (417;165).

After talking to Rowan, you will receive a new clothing for a reward:
Mithril Appraiser

Followed by the final piece of rewards for completing the ‘Source of Magic' questline:
500 Diamond, 20,000 Gold, and Enlightening Echo Artifact
How to Unlock

‘Source of Magic' story quest becomes available after you have accessed the Golden Wheatshire 4 and completed the Ryeham Tales: Golden Banquet Quest. Resonance Level 35 and AFK Stage 55 are required to unlock Wheatshire 4 and access the quest location.
Source of Magic Rewards
| Mithril Appraiser 500 Diamond 20,000 Gold Enlightening Echo Artifact |
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