So, you load your sprite into the unity editor. You drop it into a scene to start animating, but something looks wrong — it’s all blurry! You may have seen what i’m talking about in the picture below.
Frustrating, right? Well you will be glad to hear the answer is simple.
The most likely cause is a feature called filtering. Filtering is used in real-life textures to blend the pixels together to give it a more natural look. But if you have a sprite that is in a pixelated style, this is obviously desirable.
To disable texture filtering click on your sprite in the Project window. Then, in the inspector, change the filter mode drop-down to Point (no filter). Then at the bottom click apply.
Your texture should now be as clear as water! If this method does not work, make sure you have Generate Mip Maps enabled.
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Pixel Character Credit design.tutsplus.com