Pretty sure this doesn’t exist currently: if borrowers could initiate the selling of collateral for loan repayment, rather than wait for liquidation, they’d be able to sell the collateral when they perceive the market is appreciated or near ATH. At the moment, the only option is to “withdraw” collateral, which is completely different, as only collateral allowed by the LTV is accessible.
Why might this be useful? Several scenarios come to mind.
(1) Loans used to buy more bluna at low prices, seeking to exit at high price before correction
(2) For reasons unique to an individual, they had to take large loans to cover expenses and seek to pay those loans back with collateral at a higher price point rather than wait for an inevitable correction to liquidate at a lower price.