Decentralized finance (DeFi) systems introduce new operational risks that can affect the credit quality of issuers exposed to the sector and of digital financial instruments. These risks span the life of a DeFi-based operation, beginning with onboarding risk, then bridge and transfer risk, storage risk, chain-specific risk, and concluding with exit strategy risk. The threats primarily relate to fund-flow mechanics, security, and custody. They weigh on credit quality through their potential to interrupt, diminish, or result in the loss of cash flows to investors.