Science Popularization: What exactly is OI that everyone is debating and what is its use I like to play with post-00s generation, which allows me to learn many new words. For example, my recent catchphrase is "OI", pronounced as "Oh one", which doesn't have any special meaning but feels cool. Coincidentally, recently there has been a chaotic battle among Perps DEX, with everyone vying and spitting at each other, and the core vocabulary surrounding it is also "OI". What is this saying? Let's dive in! ⬇️ In futures or options contracts, OI stands for Open Interest Open Interest, which refers to the total number of contracts in the market that have not yet been hedged or settled. Simply put, it refers to the total number of positions that have been opened but not yet liquidated, reflecting the basic situation of how many people are opening short or long positions. So, the higher the OI of a market, the more people participate, the higher the market activity, and the better the liquidity. At this time, there are great trading opportunities, and vice versa. OI is usually settled daily, and the exchange will count the total number of long/short contracts that have not been closed. The OI increases when new positions are opened and decreases when positions are closed. This is roughly the logic. However, things are often not that simple. Simply looking at OI data is not enough to objectively evaluate the fundamentals of a trading market? Many factors such as market operation incentives, arbitrage opportunities, leverage, and token types can affect changes in OI. If you have to find a strongly correlated indicator, it must be trading volume. The trading volume is the sum of the day's buying and selling, which is the amount of trading that has already occurred. Volume represents what has already happened, OI represents what has not happened, and combining the two can better analyze the market. High OI+high volume=new capital entering, strong signal High OI+low volume=funding wait-and-see, stalemate signal Low OI+high volume=large-scale liquidation, reversal signal Low OI+low volume=lack of confidence, correction signal In addition to this pairing, there is a simpler indicator: Volume/OI, trading volume/open interest ratio, which reflects the turnover rate or turnover speed of market positions, similar to the return rate of restaurants. The higher the ratio, the more active the market is, but there may be a lot of short-term arbitrage and speculative behavior inside. Conversely, if the ratio is lower, it tends to be relatively stable, with good liquidity but insufficient stimulation. Taking the recently popular @ edgeX_exchange as an example, a few days ago for 24 hours: Volume=1.5 billion US dollars OI=970 million US dollars Volume/OI is approximately 1.55 This data is at a moderate level, which means it is very healthy, suitable for neutral strategies, and has sufficient liquidity. If OI increases, it indicates that more new funds will enter. By comparison, the ratio of lighter is 3.58 and Aster is 8.33. The data shows overheating, and theoretically, liquidity is better. However, due to high turnover rates, price fluctuations are more likely to cause liquidation. In fact, it is true that FOMO has been flooding in recently. Simple understanding: Aster is the most radical: short-term craze, great opportunity but easy to fluctuate EdgeX is the most stable: suitable for risk control and long-term value Lighter compromise: As a mid size platform, it is easy to get started with It is worth noting that different platforms have different regulatory mechanisms for OI. For example, edgeX gives OI a 5% point reward, which means that if you open a position and do not close it at the snapshot time, you will also receive points. Conditions such as these will affect the values to varying degrees and are mainly used to regulate the risks brought by market overheating or undercooling. At this point, you can now understand what they are speculating on and use data to evaluate the strengths and weaknesses of these platforms. / Author: Anymose | A Soft Core Science Popularization Writer This article is for educational purposes only and does not constitute any investment advice. Always remember DYOR!