According to a new note from Flowdesk, Stream Finance’s recent disclosure of a $93 million default and loss, combined with the $20 billion crypto crash in October, has digital asset lenders scrambling to reduce risk while maintaining strong credit lines.
Flowdesk says leverage declines as traders re-evaluate counterparties, but credit is not frozen. Borrowing demand for SOL,
Yields on low-risk prime loan pools like Maple and Jito have seen some compression, but remain stable and well above the 5% Chainlink DeFi Yield Index and 10-year Treasury yields.
Flowdesk’s credit desk said it had observed “deleveraging flows as counterparties reposition and re-evaluate amid recent price action,” noting that while capital is leaving riskier pools, “a few counterparties have stepped in to add leverage at current levels, focusing on the majors.”
“Overall, rates and yields have compressed across the board, with defensive positioning widespread and many participants sidelined, awaiting a sharper market rebound,” the firm wrote.
The question is: when will this market rebound?
CryptoQuant says the market is giving bearish warning signs as it has in 2022.
If this crystal ball proves correct, the coming weeks could put more pressure on funding rates and further compress DeFi lending pool yields, bringing them closer to what Treasuries earn.
