Inspired by the game Kyora. Made in Unity URP using compute shaders.
I generate a SDF of the scene using the Jump Flood Algorithm. The wall, ground, background, and light pixels are rendered to textures to be used as masks in later shaders. I use the Radiance Cascades algorithm to create the global illumination, also using raymarching for the light rays. The final result is blended on top of the scene. Outlines are generated based on the previous masks to highlight the edge as well as separate the edge to create contrast for interactable blocks.
The light rays are shifted 1 pixel in the light direction and tested to see if it's on the ground mask. If so, it will brighten the pixel substantially, making the highlight noticeable.
Lighting in the scene is intended to be used to subtly guide the player on where to go. Days and bright and safe feeling while nights are much darker, only allowing you to see a small amount without a light source to emphasize its danger.