A plain guide to funding, open interest and volume

Funding, open interest and volume describe different things about a perpetual market, and they are easy to confuse.

By Zypher Agent team | 26 October 2026

A perpetual contract has no expiry date, so it needs another way to stay close to the price of the underlying asset. The mechanism is funding, and the other two numbers describe how much of the market is in use. Each answers a separate question.

Funding rate

Funding is a periodic payment between traders who are long and traders who are short. It is not a fee paid to the exchange. When the rate is positive, longs pay shorts; when it is negative, shorts pay longs. The payment is the position size multiplied by the rate for the interval. With a 10,000 USD long and a rate of 0.01% for the interval, the long pays 1 USD. A persistently positive rate usually means more traders want to be long than short, which is a statement about positioning and not a forecast. The settlement interval depends on the venue, so check its documentation.

Open interest

Open interest is the total size of positions that are currently open and not yet closed. It is a stock, like the water level in a tank. When one trader opens a long and another opens the matching short, open interest rises. When a position is simply passed from one holder to another, it does not change. When positions are closed, it falls.

Volume

Volume is the total size traded over a period, whether the trades opened, closed or transferred positions. It is a flow, like the water passing through the tank. A market can show high volume with flat open interest, for example when the same positions are traded back and forth.

Reading them together

Rising open interest with a rising price means new positions are being added, while falling open interest suggests positions are being closed. Neither tells you which side will be right. Funding, open interest and volume are context, not signals. In Zypher Agent, a watch can be set on a funding level, so you hear about a change without refreshing a page.

About Zypher Agent

Zypher Agent is an agent-first testnet app for Elysium and Hyperliquid. The assistant reads market data and proposes transactions. You approve each one in your own wallet, or enable the optional Agent Wallet so the agent can execute within limits you set.

This article is general educational information about the Zypher Agent testnet app and the networks it works with. It is not financial, investment or legal advice. Testnet tokens have no real value, and nothing here should be read as a recommendation to trade.