Note. Unity 5 introduced the Standard Shader which replaces this shader.
Note. Unity 5 introduced the Standard Shader which replaces this shader.
Cutout shader is an alternative way of displaying transparent objects. Differences between Cutout and regular Transparent shaders are:
This shader uses an alpha channel contained in the Base Texture to determine the transparent areas. If the alpha contains a blend between transparent and opaque areas, you can manually determine the cutoff point for the which areas will be shown. You change this cutoff by adjusting the Alpha Cutoff slider.
Diffuse computes a simple (Lambertian) lighting model. The lighting on the surface decreases as the angle between it and the light decreases. The lighting depends only on this angle, and does not change as the camera moves or rotates around.
Generally, this shader is cheap to render. For more details, please view the Shader Peformance page.