Answer:
DSC is a form of visually lossless compression over DisplayPort or HDMI, which allows for higher resolution and refresh rates at no perceptible penalty to image quality or performance.
DSC is an improved form of data rate compression. It is available on some newer monitors and graphics cards (AMD Navi, NVIDIA Turing/Ampere, or newer) over DisplayPort 1.4, DisplayPort 2.1 and HDMI 2.1.
Note that not all DP 1.4 and HDMI 2.1 inputs support DSC since it’s an optional feature for these connectivity options, whereas all DP 2.1 inputs support DSC.
This type of compression is visually lossless, meaning that the difference in image quality between compressed and uncompressed signals is not visible to the human eye. There’s a small impact on latency (~0.001ms), which is imperceptible.
Using OSRTT, we measured display latency on the MSI MPG 341CQPX with DSC on and off, and there was no difference except for the margin of error. At 165Hz, display latency was 4.714ms with DSC on, and 4.718ms with DSC off.
Note that on some monitors, DSC cannot be used at the same time as NVIDIA DL/DSR (Deep-Learning / Dynamic Super Resolution), which renders the image at a higher resolution and downsamples it to the monitor’s native resolution. This doesn’t seem to be an issue with the RTX 50-series GPUs, though.
DL/DSR is not to be confused with DLSS, which is an upscaling technology that works at the same time as DSC.
AMD’s Virtual Super Resolution feature works with DSC enabled.
Another thing to keep in mind is that the PS5 doesn’t support DSC and because its HDMI 2.1 port is limited to 32 Gbit/s, you’re limited to 4:2:2 chroma at 4K 120Hz.
If a certain display, such as the Gigabyte FV43U with HDMI 2.1, supports only 24 Gbit/s and relies on DSC for a visually lossless compression up to 4K 144Hz, it means that the PS5 will be further limited to 4:2:0 chroma at 4K 120Hz. However, you most likely won’t notice this in video games at a normal viewing distance.
