This blog post describes the basics of Crunch compression and explains in details how the original Crunch algorithm was modified in order to be able to compress ETC1 and ETC2 textures.

Crunch is a lossy texture compression format, which is normally used on top of DXT texture compression. Crunch compression helps to reduce the size of the textures in order to use less disk space and to speed up downloads. The original Crunch compression library, maintained by Bi...