I like it! all the different particles moving away at different speeds is cool. has a kind of magic vibe, I can imagine it being satisfying. Have you put it in game? that often lets you see it in a new light, the best light really, as that's where it will end up!

I might add one or two more frames at the start, with the block swelling and its straight lines becoming curves, and also maybe try drastically lightening up the block's colours on a frame or two as if its being overcome with the magic energy that pops and disintegrates it.

Looks really cool man, as it did when I saw it in slack! Voted for it

1. I don't have a suggestion for an algorithm, but if its not too much work to integrate the kind of existing algorithms ai mentioned, why not add multiple algorithms and give us some choice in the UI? that would be pretty cool ive got to say

2. totally agree with what 32 said. A detailed palette merger where you can either manually decide on a per-colour basis whether it comes over (and choose which colour it replaces etc), or just apply the automatic colour-matching algorithm that does the work for you and stores the unused new colours in the palette, would be good. A 'remove unused colours' option like GG would be good, just in general palette options or a button.

3.
yeah that sounds good, Id like the option to show only the frame behind or only the frame in front though, it can sometimes be a bit confusing to see both.

try and rotate the sprite in your mind's eye, bearing in mind the perspective. for example her right shoulder will go up relative to the canvas, her left shoulder will come down towards us. facing left we're going to see the top side and the left side of her, your first attempt is missing that top side