Create a sprite base and at least 4 different versions with costume/hair/feature/equipment variants (for a total of 5 sprites). The base doesn't have to be human and/or anything conventional.
Canvas Size - Unrestricted.
Colours - Max 32.
Transparency - Required.
Animation - No.
The unrestricted canvas size makes me wish animation was permitted... 
I have the same quesiton as Dastal. Can the pose change slightly depending on what he is wearing/holding?
(hint: check the forum thread) 
I now expect to see some massive sprites from you Mrmo :p
Can we modify a bit the base when we make the 4 differents versions?
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Slight modifications on the base is completely OK. It's within the nature of sprite bases.
Also pose modifications are OK as much as needed.
Huge modifications that suggest 2 completely different bases are not OK (such as gender change). If you plan to do that, make 2 separate entries instead.
Animating 4 sprites are not a job of a week and if a few people spent the time to do it, it would be unfair competition. We make a sprite animation challenges time to time, and this is not one of them. On the other hand, as always it's OK to animate one of the sprites for the preview of the submission. OR you can animate the whole piece after the challenge ends.