# Margined Protocol Whitelisted Address for Deployment of Power Perpetuals Contracts **URL:** \ **Category:** DApps / Tooling\ **Tags:** passed\ **Created:** [October 18, 2023, 1:13pm UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458 "2023-10-18T13:13:57Z")\ **Posts on this page:** 12\ **Page:** 1
**Author:** ![shapeshed](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/shapeshed/32/363_2.png) [@shapeshed](https://forum.osmosis.zone/u/shapeshed)\ **Post date:** [October 18, 2023, 1:13pm UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458/1 "2023-10-18T13:13:57Z")
# Margined Protocol Whitelisted Address for Deployment of Power Perpetuals Contracts ## Proposal Summary This proposal seeks to grant permission to `osmo1g8qypve6l95xmhgc0fddaecerffymsl7kn9muw` for deploying Margined Protocol’s Power Perpetuals contracts on the Osmosis network. The address, managed by @shapeshed and @maxrobot, will have the authority to upload CosmWasm contracts without requiring further governance approval for each deployment. ## Contracts to be Deployed The proposal includes the deployment of a suite of contracts to offer Power Perpetuals on Osmosis: 1. Power Contract: Minting and burning of power perpetuals. 2. Query Contract: Provides a price discovery helper. 3. Staking Contract: Enables $MRG token 4. Collector Contract: Manages the collection of Margined Protocol fees. ## Audit and Security These contracts have undergone thorough audits conducted by Oak Security, with financial support from the OGP. # Protocol Enhancements The Margined Protocol will be further strengthened through the integration of the $MRG token and the establishment of an OSMO / sqOSMO liquidity pool to support the initial Power Perpetual use case. ## Permissions Clarification This proposal exclusively addresses the initial Power Perpetual contracts and their potential future upgrades. It does not grant blanket permission for all contracts or changes. ## About Margined Protocol Margined Protocol is actively engaged in the development of decentralized perpetual protocols for CosmWasm networks. One of its significant innovations is the use of concentrated liquidity pools, which facilitates genuine price discovery within these contracts. This innovation distinguishes Margined Protocol from oracle-based “perpetual” protocols, as it empowers traders to actively contribute to the market’s information flow. Why Price Discovery Matters Price discovery is the cornerstone of effective markets. Unlike traditional crypto derivatives, where trading occurs passively based on external data sources, Margined Protocol’s approach aims to foster genuine on-chain derivative markets. This enables the transfer of risk between market participants, a crucial step for the crypto space to mature beyond a sandbox. ## Resources For more information on Margined Protocol, please refer to the following resources: - Docs: [What is Margined Protocol?](https://docs.margined.io/) - Github: [Margined Protocol](https://github.com/margined-protocol) - Twitter: [margined\_io](https://twitter.com/margined_io) ## Pre-Requisites and Timeline Testing of these contracts is still ongoing on the testnet, and the official on-chain deployment date is yet to be determined, although it is expected after October 20th. Your support for this proposal will contribute to the growth and evolution of decentralized derivatives markets, fostering greater liquidity and true price discovery in the crypto ecosystem. ---
**Author:** ![LeonoorsCryptoman](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/leonoorscryptoman/32/208_2.png) [@LeonoorsCryptoman](https://forum.osmosis.zone/u/LeonoorsCryptoman)\ **Post date:** [October 18, 2023, 9:10pm UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458/2 "2023-10-18T21:10:18Z")
How does this perpetuals product differ from Levana? ---
**Author:** ![margined\_io](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/margined_io/32/364_2.png) [@margined\_io](https://forum.osmosis.zone/u/margined_io)\ **Post date:** [October 19, 2023, 11:19am UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458/3 "2023-10-19T11:19:42Z")
> How does this perpetuals product differ from Levana? Great question! So Margined Power Perpetuals are quite different to Levana in a number of key ways. Tl;dr 1. Tightly coupled with Osmosis DEX, as it use’s CL pools for price discovery 2. Price discovery for the perpetual is on-chain, i.e. it’s DeFi native and decentralised 3. Payout structure is different as it gives leverage for square of base asset 4. No liquidation for long positions 5. Ability for strategies to be deployed directly on-top of the strategy which is something we also plan to do post-release of the initial perp contract In slightly more detail. Margined Power Perpetuals use a Osmosis CL pool to price the power perpetual. Thus our power perps will increase usage of the Osmosis DEX. As a follow on to the previous point this means price discovery is 100% on-chain and not reliant on an external oracle. Having on-chain price discovery is very important for crypto more generally as it allows derivative markets to move on-chain and not have the most amount of volume trade on CEXs. If DeFi cannot have on-chain price discovery then crypto markets will likely remain concentrated on CEXs. Not using an external oracle for pricing also means Margined Power Perpetuals do not need to continually update prices on-chain and consume blockspace. Further we believe it is a more decentralised solution. The payout structure of a power perpetual is different to a traditional perpetual as it tracks the square of the base asset’s price. For more details see [here](https://docs.margined.io/overview/power#examples). Margined power perps are to be coupled with strategies that will enable users to utilise perpetual products more easily. Examples of which include a crab strategy that seeks to profit during stable market conditions. I hope that is a basic overview of how we offer a differentiated product to Levana and hope you see how this will also add value to Osmosis’ offering. Can chat in detail if you like 🙂 ---
**Author:** ![faddat](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/faddat/32/2098_2.png) [@faddat](https://forum.osmosis.zone/u/faddat)\ **Post date:** [October 20, 2023, 11:23am UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458/5 "2023-10-20T11:23:40Z")
> [@margined\_io](#): > > No liquidation for long positions How’s this work? And please explain it to me like I’m a little dumb, so let’s say Bitcoin is $1,000 and I go long 30x and it dumps to 900, how do I not get liquidated? ---
**Author:** ![margined\_io](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/margined_io/32/364_2.png) [@margined\_io](https://forum.osmosis.zone/u/margined_io)\ **Post date:** [October 20, 2023, 11:47am UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458/6 "2023-10-20T11:47:43Z")
So for a user going long it does not actually involve leverage, rather you are buying exposure to osmo^2 through the squosmo that should have a payout similar to the underlying asset squared. When a user wants to go long they simply buy the squosmo token from the pool. However, short positions are at risk of liquidation as user’s going short need to provide collateral to mint the squosmo token and can be liquidated if the collateral ratio goes below 150%. This is why power perpetuals are often described as an evolution of everlasting options. Let me know if you want more details 🙂 ---
**Author:** ![trix](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/trix/32/2708_2.png) [@trix](https://forum.osmosis.zone/u/trix)\ **Post date:** [October 20, 2023, 4:02pm UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458/7 "2023-10-20T16:02:14Z")
So instead of long liquidations, its more like increased losses? ---
**Author:** ![margined\_io](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/margined_io/32/364_2.png) [@margined\_io](https://forum.osmosis.zone/u/margined_io)\ **Post date:** [October 20, 2023, 5:06pm UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458/8 "2023-10-20T17:06:33Z")
Not sure I completely follow what you mean. So if you go long and the price goes down your position will lose value. However, unlike in a tradition perp it will not get liquidated if the collateral value is lower than the maintenance margin. So for long positions I would even say decreased losses 😉 That being said it’s not really appropriate to compare like for like as a power perp gives you the exposure of the base asset squared whereas a traditional perp will give you 5x, 10x, 20x… Does that answer you question? ---
**Author:** ![faddat](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/faddat/32/2098_2.png) [@faddat](https://forum.osmosis.zone/u/faddat)\ **Post date:** [October 20, 2023, 7:37pm UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458/9 "2023-10-20T19:37:04Z")
I definitely need help understanding this By the way is the code open source? But yeah like if you could sort of describe that as more of a user flow that would be awesome. ---
**Author:** ![trix](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/trix/32/2708_2.png) [@trix](https://forum.osmosis.zone/u/trix)\ **Post date:** [October 20, 2023, 10:49pm UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458/10 "2023-10-20T22:49:38Z")
more so yeah, when you said swap I assumed the long didn’t have collateral. But since you have squared exposure I’m assuming you would lose more on the downside compared to a normal spot position, that’s what I meant by increased losses. ---
**Author:** ![margined\_io](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/margined_io/32/364_2.png) [@margined\_io](https://forum.osmosis.zone/u/margined_io)\ **Post date:** [October 21, 2023, 11:14am UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458/11 "2023-10-21T11:14:43Z")
> I’m assuming you would lose more on the downside compared to a normal spot position, that’s what I meant by increased losses. Compared to a spot trade then yes if the price goes down then you will have a higher loss. But maybe a better comparison is the following diagram - just mentally change Eth for Osmo… ![payoff-eth-squeeth](https://us1.discourse-cdn.com/flex020/uploads/osmosis1/original/1X/5c91ecfc82b3e501723611bc795826fdb6ab324f.webp) ([source](https://medium.com/opyn/squeeth-primer-a-guide-to-understanding-opyns-implementation-of-squeeth-a0f5e8b95684)) > By the way is the code open source? It is 🙂 please see [here](https://github.com/margined-protocol/power) ---
**Author:** ![margined\_io](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/margined_io/32/364_2.png) [@margined\_io](https://forum.osmosis.zone/u/margined_io)\ **Post date:** [October 21, 2023, 11:27am UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458/12 "2023-10-21T11:27:29Z")
Sure no problem. The flow is a little hard to grok at first because it’s not just open or close a position as in traditional perps. However, we have a helper functions in the contract, and [UI](https://testnet.margined.io), that automate the more complicated short user journey described below. High level user flow: Going short: 1. Short seller comes to power contract and deposits collateral to mint `squosmo` token. 2. a. Short seller LPs `squosmo` and `osmo` in the relevant pool, earning a payout of approx. `osmo^1.5` b. Short seller sells `squosmo` for `osmo` in the relevant pool, and can earn the funding rate Going long: 1. User sells `osmo` for `squosmo` in the relevant pool 2. User sells the `squosmo` in the pool realizing pnl Tried to keep it brief so let me know if you need more detail 🙂 ---
**Author:** ![sunnya97](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/sunnya97/32/375_2.png) [@sunnya97](https://forum.osmosis.zone/u/sunnya97)\ **Post date:** [October 21, 2023, 12:51pm UTC](https://forum.osmosis.zone/t/margined-protocol-whitelisted-address-for-deployment-of-power-perpetuals-contracts/458/13 "2023-10-21T12:51:42Z")
> [@trix](#): > > more so yeah, when you said swap I assumed the long didn’t have collateral. But since you have squared exposure I’m assuming you would lose more on the downside compared to a normal spot position, that’s what I meant by increased losses. No, you actually will “lose less” on the downside. If OSMO goes down 50%, sqOSMO will go down 25% What’s the catch? To hold this sqOSMO position will require paying a relatively high funding rate to the shorters