I often hear people recommend using Crunch Compression on avatar textures to reduce the avatar size and improve performance. I have a small issue with that: It doesn't improve performance, it reduces it.

What does Crunch Compression do?

Crunch Compression actually does, what its name suggests: It compresses the images. The only issue is that Unity still has to be able to use the images, so it needs to decompress them before they can be used, resulting in a small stutter. The higher the compression rate and the more files you compress, the bigger the stutter.

This means that Crunch Compression makes the download size smaller - but it does not reduce the texture memory size. For a long time, this didn't matter, as VRChat ranked avatars by their download size, among other things. This is no longer the case as VRChat now uses the texture memory size instead, and as you can remember: This doesn't get changed by the Crunch Compression.

What can I do instead?

You can change the Max Size of your textures!

Of course, nobody wants to have blurred textures on their avatar, but keep in mind: You don't have to change the size of every texture. Your body color? Sure, that can remain 2k or 4k. But the texture of your eyes, or other accessories... those can be resized to a smaller amount, e.g. 1024 or even 512. Nobody's gonna look at your eyes or accessories from a 10 cm distance. Additional textures (metallic, normals, ambient occlusion, etc.) should definitely not remain full size and can be set lower, depending on the wanted effect on the avatar.

If you want to read more about this topic, I can recommend reading the official documentation by Unity: https://docs.unity3d.com/6000.0/Documentation/Manual/texture-compression-fundamentals.html

In the end, you'll have to play around with the settings and find some that are a good balance between performance and texture clearness.