GIF is another file format used for Web graphics. While GIFs support transparency, on the down side you must save GIFs in the Indexed Color mode, which comprises 256 colors or less. Although this is great for making tiny files, it’s not so great for continuous-tone images where the number of colors displayed is critical. Therefore, the GIF format is usually reserved for illustrations (spot illustrations, buttons, logos, and so on) and type with large areas of flat colors and sharp details.
GIF Format in Photoshop
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