It seems like with the exception of GIFs, all user avatars are downscaled to be 256px wide and lossily compressed to 75% quality, with PNGs being converted to WEBP. Here's how yours would look with 100% quality: https://www.fruityrumpus.com/_next/image?url=%2Fapi%2Favatars%2Ffile%2Favatar-benthicecdysis.png&w=256&q=100

So I guess if you want a crisp, clean avatar, make it a 256px square GIF image.