Perpetual futures open interest (OI) has become the most reliable indicator of systemic trust and liquidity in DeFi. Unlike TVL, which can be inflated by incentives, or volume, which is often short-lived, OI reflects capital committed and risk sustained. High and sticky OI signals structural adoption of a venue, and its reflexivity often compounds into ecosystem-wide growth. 1/ OI as the Core Liquidity Signal 1. Capital Commitment: OI measures collateral actively posted in perp markets; a proxy for how much risk traders are willing to hold. 2. Trust in Execution: Traders only leave collateral in venues with strong risk engines, solvency guarantees, and deep liquidity. 3. Reflexivity Loop: Higher OI generates more fees → fees attract market makers → liquidity improves → OI expands further. This feedback loop makes OI the heartbeat of DeFi: a leading indicator of liquidity health across ecosystems. 2/ How OI Shaped the Last Cycle 1. @dYdX (2021–22): OI growth signaled the first...
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