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Borrowing vs. Selling

Selling an asset involves closing the position on that particular token to free up liquid capital. If an individual is "long" on a particular asset, selling it would no longer entitle them to any potential upside on that asset's appreciation. Furthermore, in most countries, selling a position is treated as a taxable event.

Borrowing enables one to obtain capital without selling the underlying asset or incurring a capital gains sales tax.

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