Borrow/Mint vs Short Farm

Now that we have the option to Short Farm in v2, I do not understand why anyone would Borrow/Mint an asset.

The only thing I can see is that if I wanted to short an asset and sell it immediately for UST, I could Borrow/Mint and sell. However, I’d miss out on Short Farming rewards, so don’t understand the reasoning for Minting rather than Short Farming…

Is it that Borrow/Mint is just a legacy from v1? Or is there a genuine reason to use Borrow/Mint that I am failing to grasp?

Key differences in short farming vs mint and sell:

  • 2-week lock-up period on UST from sale
  • 1.5% tax on minted value (or something like that)

So if you want to short for a small amount of time or don’t want to do the 1.5% tax then you can just mint and sell, does seem like farming is overall better but definitely a give and take

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Hi @DYair,

Thanks for your input. Yes, I’m aware of the 2 week lock up. Sorry if I wasn’t clear in the OP. That said, I hadn’t considered its significance. Thanks for highlighting it to me.

I suppose if you think a stock is going to drop in price tomorrow, you might want to sell it today and buy back tomorrow. The Short Farm option isn’t really suitable in this scenario.

I think the 1.5% tax is levied on both Borrow/Mint positions as well as Short Farm positions when you want to close your position.