Plain-English definition
Open interest is the value of perp or futures positions that have not been closed. It tells you how much leverage is still in the market.
It does not tell you direction by itself. Rising open interest means more leverage is entering; funding, price, and liquidations tell you which side is crowded and where the stress may sit.
Why it matters
Open Interest matters because crypto markets can look precise while still being shallow, crowded, or poorly sourced. A useful read is not just the number. It is the number, the size behind it, the context around it, and the part it cannot explain.
Simple example
A simple Open Interest example is a reader comparing two venues with the same headline price but different depth. The deeper venue can absorb more capital before the trade, peg, or yield reading starts to move against the user.
How Bathymark uses this term
Bathymark uses Open Interest to translate open market data into live liquidity readings. When the term touches a live page, the reading links back to the relevant chain, protocol, stablecoin, DEX, perps, or Signal so the source remains checkable.
Common mistake
The common mistake is treating Open Interest as a complete signal by itself. Bathymark treats it as one instrument: useful when read beside liquidity, source, size, and what the number cannot prove.