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How do I to create XYZ files? [Needed for Facesets]

Hey, Kaigura here.
I'm feeling limited using the small amount of space for a character's avatar / faceset in the PNG format. I heard the XYZ file format allows me to have more room for the faceset. I've looked around but I still don't have a clue about how to create XYZ files for my game.

Is anyone here able to explain it to me?
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