Uses the current color a transparency key to determine which areas of the image should be transparent (cyan/sky-blue in this example):
Shrink Alpha
Shrinks the boundaries of objects by extending the coverage of transparent pixels by the number of pixels specified. This can be used to clean the edges of cut-outs by removing a fixed number of edge pixels while retaining alpha transitions.
Dissolve
Simulates dissolve blending. Pixels are made either fully opaque or fully transparent based on random numbers weighted by the current alpha value.