Stream Finance's recent disclosure of a default and $93 million loss, combined with October's $20 billion crypto crash, has left digital-asset lenders scrambling to unwind risk while keeping credit lines robust, according to a new note from Flowdesk.

Flowdesk says leverage is getting reduced as traders reassess counterparties, but credit hasn’t frozen. Borrowing demand for SOL, XLM, ENA, APT and BTC remains “robust,” Flowdesk wrote, mostly tied to hedging and funding strategies rather than directional bets.

Yields for low-risk blue chip lending pools like Maple and Jito have seen compression, but remain stable and well above the Chainlink DeFi Yield Index of 5% and 10 year treasury yields.

Flowdesk’s credit desk said it has observed “deleveraging flows as counterparties reposition and reassess amid recent price action,” noting that while capital is rotating out of riskier pools, “a few counterparties have stepped in to add leverage at current levels, focused on majors.”

“Overall, rates and yields have compressed across the board, with widespread defensive positioning and many participants sidelined, awaiting a clearer market rebound,” the firm wrote.

The question is: when will this market rebound?

CryptoQuant says the market is flashing bearish warning signs like it did in 2022.

If that crystal ball proves right, the coming weeks could put more pressure on funding rates and further compress yields across DeFi credit pools, bringing them closer to what treasuries earn.