Quick summary
If you create a set of meshes with names ending in _LOD0, _LOD1, _LOD2, etc, for as many LOD levels as you like, a LOD group for the object with appropriate settings will be created for you automatically on import. For example, if the base name for your mesh is Player, you could create files called Player_LOD0, Player_LOD1, and Player_LOD2 to generate an object with three LOD levels. The numbering convention assumes that LOD 0 is the most detailed model, and increasing numbers correspond to decreasing detail. More info about Level Of Detail (LOD). More about LOD Groups.
LOD Fade
You can enable LOD Fade by selecting your GameObject with all LODs and inside LOD Group set Fade Mode to Cross Fade, and enable Animated Cross-fading.
You can achieve much better fade effect by using this Shader: CrossFadingLOD After you download CrossFadingLod-master.zip - inside you will find a folder called Assets, open it and extract 2 files:
- CrossFadingLodDither.mat
- CrossFadingLodDither.shader
Put them to your Unity 5 project and change all LODs (_LOD0, LOD1…) Material to CrossFadingLOD (Dither).
Now you should have very nice fade mode!
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