Cut Out Tool
Use a predifined stamp to make a shape from your image and to add a fuzzy border around your image.
To open the 'cut-out' tool, press the following button in the toolbar
Cut out a shape and choose blur. (blur not working on animated images).
Trim or cut out Image
It is all rather straight forward to cut a shape from your image.
(the background is transparent!)
You can play around with the fuzz factor to see a blurry edge with the image
Note that with animated gifs you can not have a blurry/shady edge!.