Why is the image that I copied with the lasso getting more blurry every time I paste it into a new frame?

This is the normal behavior of raster images which are images that contain pixel data. They aren't vector images where you can resize without losing quality.

Selecting a part of an image and copying and pasting it and copying it again and pasting it again should continue to copy and paste the same pixels without losing quality. The issue is when the selected image is copied and then rotated or scaled. Once the rotation or scale happens it changes the individual pixels. Those pixels will never be the same as they lose some of the original details. That is why when you copy and paste and then copy the newly pasted image the image keeps getting blurry as it loses information, essentially loses quality.

While this isn’t fixable, how can you avoid this from happening? 

  1. Always copy from the original source, not an already modified pasted image. Some animators create a frame with all the parts of a character and refer to it to copy elements.
  2. Make the canvas size bigger to have more pixel data so it's harder to notice the pixel degradation.
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