LOD currently relies on an automated procedure to reduce polys. this may be user friedly, but most of the time, it is insufficient. i have plants that have 4 LOD steps from 1200 tris to an alpha mapped quad. no algorithm in the world (except for dynamic impostors, maybe) can reduce the whole tree to an alpha mapped quad automatically. imagine a big asteroid field, same problem. the asts far away would waste thousands of polys, because the automatic algorithm would render more than a quad.
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