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Flip Green: Here you can change the axis in the dropdown to match the Normal/Derivative maps for your engine or application as required. By default Knald is set to X+Y+Z+, so if you are using a Normal or Derivative map that differs from this configuration, you will need to change this setting. To change this setting check the Flip Green check box to save your choice.
View OS Normal: Enables the viewing of the Object Space Normal map in the Normal tab rather than the default Tangent Space Normal map.
Bump Scale: The global strength of the processed Normal and Derivative maps.
Knald uses MikkTSpace by Morten S. Mikkelsen, which is available, for free, from http://wiki.blender.org/index.php/Dev:Shading/Tangent_Space_Normal_Maps & the xNormal SDK.
It also calculates the bitangent on the fly by default due to the fact that it is more efficient on modern hardware (sending data from vertex to pixel shader is more costly than executing a minor calculation in the pixel shader), which is consistent with Unreal Engine 41) & Blender.