There are 9 power stones to unlock and each of these have different color.
Player can unlock levels above 50 while completing steps of Power Stones quest.
Each unlocked Power Stone appears as a glowing crystal on your compass (in hand + inventory) but I was unable to see crystals on other players compass.
Players can unlock new dance styles with each Power Stone unlocked.
Killing final boss gives player skin item (I was unable to interect with it so far) and it persists through death in inventory.
The latest version of this steam guide can always be found here
Sorry for screenshots quality. Server + Client launched on same machine are CPU and RAM intense and I am doing tests on i5-3450 potato -.-

Each of Power Stones is located within hidden chamber under any of 8 PVE islands.
Ninth Power Stone is carried by the Ghost Ship.
Each Power Stone also rises player's max lvl cap by 3 or 4 levels. Cyan stone rises it by 5.

(it is located under island = you will not see it this way in game)



To unlock Power Stone you need to bring Artifact Key to chambers altar.



Artifact Key’s are dropped by island bosses (automatically added to inventory of each player participating in fight): Hydra or Dragon. Interacting (E) with chambers altar while having Artifact Key in your inventory unlocks: Journal inscription, new dance style, power stone of right colour, higher lvl cap.
Artifact Key’s have spoil time of 2 hours.

• C6 = The Blue Stone of Power (internal island name: Mnt_X_WR_PVE)
  
• D12 = The Turquoise Stone of Power (internal island name: Mnt_S_WT_PVE)
  
• F8 = The Green Stone of Power (internal island name: Cay_C_EE_PVE)
  
• G3 = The Yellow Stone of Power (internal island name: Mnt_R_CH_PVE)
  
• H6 = The Orange Stone of Power (internal island name: Mnt_R_CL_PVE)
  
• M12 = The Red Stone of Power (internal island name: Mnt_G_ET_PVE)
  
• O7 = The White Stone of Power (internal island name: Mnt_U_ER_PVE)
  
• O14 = The Purple Stone of Power (internal island name: Mnt_Y_WU_PVE)
  
• H8 = Center Maw (Boss fight cell)
  
• F14-F10, G10-J10,J11-J14,H14-G14: Ghost Ship route = The Cyan Stone of Power

There is only one PVE isle in the center of these cells so you will not miss it.

When you done with isle boss you have to look for object visible below. Entrance to the hidden chamber is somewhere close.

Ghost Ship carries 9th Power Stone (Cyan) and spawns in F14 cell of the map at 00:00 local cell time (if spawn is not on cooldown after it was destroyed). It is only visible between 00:00 and 5:59 although water ripple/spatter caused by Ghost Ship can be spotted during the daylight hours.
It has 100 000 hp and 30 cannons per side. Better be prepared before you engage.

Having all 9 stones on your compass will trigger boss event in the middle of the Center Maw (H7).
You have to look for water vortex. When you are on top of it (close?) Kraken will emerge. He will also spawn Ships of The Damned so be prepared to face these every 2nd odd phase. Wind will push your ship in the opposite direction so sailing is a lot harder during this event. Kreken will also start shooting giant homing sparkles into its aggro target. Forcefield tha will damage to objects when touched will be spawned around event area preventing leaving or accessing fight area. From now one you have 1 hour to finish him.



You can not damage Kraken directly. Target its tentacles to force him into even phase.



Each even phase looks the same – Kraken almost die but its being saved by entity tha looks like ARK probe (maybe Kraken is just a mask and this is real boss?^^). This entity spawn force field around itself and boss. You have to damage it or it will heal Kraken. I have no idea how to penetrate this force field in "legal" way (tested with cheat ghost to speed up process).



After this phase fight returns to odd phase but some tentacles might be empowered with electricity or behave more aggresivly.
Kraken has no loot itself.


And this is how it is look like when Kraken spawns:
https://www.youtube.com/watch?v=yf9-sRRxr5A

Map for these who want to test quest or boss fight locally: https://goo.gl/ihCvzK
(Pve spawn is disabled/bugged on a map cell where EndBossLevel is set as a ExtraSublevel. Workaround for this 1x1 cell map is to run server once with EndBossLevel removed from server settings and Template1. Log, saveworld, shutdown server. Run map with EndBossLevel.)

There is 11 types of dance available to unlock through Power Stones quest in ATLAS.
Check out this video on youtube to see how they look: https://youtu.be/sxKLxqoTolM