Summary
This proposal seeks to grant the Hydro deployment address osmo1q800ly6d972fcrjctm5e2j8fx8rx92txw76snq permission to upload contracts to Osmosis. This address is controlled by the Hydro Team, and we will use it to deploy the Vortex contracts on Osmosis.
What is Vortex?
Vortex is a protocol that allows a concentrated liquidity position that bounds the losses incurred by the LP provider https://x.com/HydroTeam_/status/1909965275346182627
The system is meant to be set up with a primary LP provider (in our case, Hydro) and a secondary LP provider (in our case, bidders requesting liquidity for their token on Osmosis). Vortex enters an LP position, containing $ATOM (provided by Hydro) and a counterparty token, e.g. $SHD (provided by the Shade team).
The Vortex smart contract will enter a CLP position on Osmosis. When the position goes out of range, it can be liquidated: Vortex will let anyone provide the ATOM that the position was initialized with, in order to receive the OSMO tokens that the position contains now. The CLP position is set up in a way to ensure that when the position can be liquidated, it contains enough OSMO to buy back the ATOM it initially started out with.
How does it benefit Osmosis?
With Vortex, Hydro can open up deployments into many more pools, pairing ATOM with other volatile tokens and deepening ATOM liquidity on Osmosis.
Hydro has already deployed around $3.2 million worth of liquidity on Osmosis. But Hydro is limited to deploying liquidity into stable ATOM<>ATOM LST positions, which limits the amount of liquidity Hydro can deploy on Osmosis. With Vortex, we expect to deepen the liquidity on Osmosis for other tokens as demand grows.
Further links
Code: Add Vortex contract by p-offtermatt · Pull Request #247 · informalsystems/hydro · GitHub
Testnet deployment: Osmosis Explorer | Celatone Explorer
