Just found on had.com:LordNothing says:
October 22, 2018 at 8:51 am
block formats are pretty easy to do but i dont think there is any support for that in the display hardware. like being able to use dxt1 at four bits per pixel, a 4x improvement over raw 16 bit color data. for every 4×4 block of cells, select the lightest and darkest 2 pixels in the block, sticking those into a color table, generate 2 interpolated pixels. those four colors become a color table and the pixels are stored as 2-bit indices. decompression is much faster as it just needs to do the interpolation step and from that it can assign color values to the pixels on the screen so the demands on the display controller would be minimal. it just has to exist first.
So given the min and max values of pixels in a square, some relatively decent compression is possible, which directly benefits from the σα code. The system is a bit more complex because there are 2 layers of compression, with very different characteristics, but the compression ratio will be better in some pathological cases such as noise or other very fine details.