How to read these two numbers
Funding rate: who is paying to hold
Perpetual contracts have no expiry date, so they need a mechanism to drag their price back toward spot. That mechanism is funding: longs and shorts pay each other on a fixed schedule. When the contract trades above spot the rate is usually positive and longs pay shorts; below spot, the reverse.
The correct reading is “crowding”: a persistently positive and elevated rate means there are enough longs willing to keep paying to maintain their positions. That tells you longs are crowded. It does not tell you longs will be right or wrong. A crowded side simply supplies more liquidation fuel if the market turns — nothing more.
Annualised: why bother
A single funding payment is usually a few hundredths of a percent, which looks negligible. But it settles every few hours, hundreds of times a year. Annualising is what makes the ongoing cost of holding a leveraged position visible and comparable with other funding costs. This page derives the annualised figure directly from the settlement interval the endpoint returns; the arithmetic is disclosed below and you can check it.
Open interest: how much fuel
Open interest is the total notional value of contracts not yet closed — the most direct reading of the leverage level. The higher it is, the more positions can be force-closed when the market moves against them. It indicates no direction by itself, but it does determine how far a move can be amplified.
One: treating the rate as a direction signal. “Funding is positive, so short it” — historically, crowded sides have both been washed out and persisted for long stretches. Using a single indicator as a signal has no foundation, and this site draws no such inference.
Two: reading notional value as invested capital. Open interest is notional, not principal. A rise can equally mean the same principal deployed at higher leverage.
Why the numbers differ between platforms
- Settlement intervals differ. Eight hours is common, but some platforms and products use four hours or one. Comparing raw rates without normalising the interval is simply wrong, which is why this page prints the interval next to the rate.
- Formulas differ. Each platform defines its own premium index, interest component and caps.
- This page reads one venue. The data here comes from OKX's public derivatives endpoints. Magnitude and trend are informative, but it does not represent “the whole market”. Market-wide liquidation and positioning aggregates require third-party dashboards, whose methodologies differ again.
How leverage turns a small decline into a large one: liquidation cascades. To decide whether the current move is leverage-driven at all, read this alongside the market heatmap.