I am trying to use this image:
as the material for a particle system I have created to look like tentacles. I noticed that the materials used in the prefab particle systems I based my design from used circular material images with color differences going horizontally, so that's what I did. The background is transparent and the image is a PNG. However, some how, I get this when I import it to Unity:
using this square version results in my particle system tentacle obviously being a square. I don't have any idea why this is happening. The only different result I've got was when I downloaded the image to my PC differently (and I think it accidentally converted to JPEG in the process) I ended up with my circle material with a white background.
You need to change import setting "alpha is transparency" to "yes" and it should be ok.
And use .png because .jpg and others don't have alpha channel.