You need to have the following things to be able to replace decals in Unbound:

• Frosty Editor 1.0.7 ⤵
  
  • download link[mega.nz]
    
  • Decryption Key in case mega asks for it
    8Cfyud0kpxxHyXM9N8-Km5kAU6Nw108FedMTYGgoCjY
  
  
• Frosty Mod Manager 1.0.7 ⤵
  
  • download link[mega.nz]
    
  • Decryption Key in case mega asks for it
    6rcrBnCFQk4PJIPiae0oCWYU0_0AuXkqYIdOvFNVrB8
  
  
• NFS Heat/Unbound Encryption Key
  
  • 0B0E04030409080C010708010E0B0B02
  
  
• Image Editing Software
  You can use any kind you want as long as you can export in the .dds file format.
  For people that never used image editing software before I recommend Paint․net because it's really easy to use and you can learn it quickly. You can get it from here.[getpaint.net]
  
  

This section will introduce a little bit of information about the textures that you're gonna need to make. Here's some basic ones:

• Resolution for the textures has to be a power of 2, for example: 2048x2048, 128x64, 4096x1024. Otherwise Frosty Editor will give you an error.
  
  
• Each decal uses 3 different textures, I will use an image of neco arc to demonstrate;
  
  • Diffuse (The main texture of the decal)
    
    
    
  • Mask (The light blue area is the mask area and the dark blue area will be transparent in game.)
    
    
    
  • Thumbnail (Transparent background, usually in 128x128 res.)
    
  
  
• Diffuse and Mask can be exported in png, you can export thumbnail as png too but it's better to export it as dds BC7
  

Find an image you want to use for the decal and open it.
Then resize the canvas so the aspect ratio is in 1:1, 1:2 or 1:4.
Then resize the image, not the canvas, to a resolution that's a power of 2 (2, 4, 8, 16, 32, 64, 128, 256, etc..) Credit: bonkmaykr

After you've done that, duplicate the layer of your image and don't touch the layer with the original image for now.

Select the layer you want to make the mask out of.

Go to Adjustments -> Curves
Change Transfer Map to RGB.
Uncheck Red and move the Blue and Green lines to the top on both sides
Uncheck Blue and Green, then check Red and move the red line down on both sides.
You should have a light blue version of the image.

Add a new layer for the blue background.
Fill it with a RGB 0/0/255 or #0000FF blue.
Move the Blue background layer below the mask.
Merge the mask with the background.
Copy mask to another tab and remove the mask layer(s) from the original image tab.
Export

Go back to the original image tab.
Copy the layer to another tab.
Resize it so the largest value is 128 and the smaller is proportional depending on the aspect ratio.
If your thumbnail is stretched in game upon importing then just turn it into a 1:1 square.
Export

Go back to the original image tab.
Add a new layer. and fill it with a RGB 0/0/0 or #000000 Black
Move it behind the original layer.
Merge the original layer with the black background.
Export

Video version:

Text version:
Open Frosty Editor.
When Frosty Editor asks you to select a profile, click New.
Go to the NFS Unbound installation folder. (If you can't find the installation folder for some reason, Unbound's installation folder isn't called "Need For Speed Unbound", it's called Excalibur.)
Select the game executable.

After the profile loads, Frosty Editor will ask you to update the SDK, with the later versions of unbound you always gotta update it.

Once Frosty Editor finishes loading the files, go to;
Vehicles -> Customization -> Swatches ->_RecategorizedDecals
Then, select any folder you want to replace decals from and find the decal you want to replace.

Each decal will have 2 textures in any folder you select, and an additional texture in a subfolder;

• A texture with the name ending in _D (This is the base texture)
  
• Another texture with the name ending in _M (This is the mask texture)
  
• The thumbnail texture is in the subfolder "Thumbnails" (This is the thumbnail (duh) )

Find a decal you want to replace, and replace the texture ending in _M with the mask and the texture ending with _D with the base, then go to the Thumbnails subfolder and replace the appropriate thumbnail.

Save the project so you can add more decals in the same project later.

If you want, you can already start the game through Frosty Editor.
However, if you want to use Frosty Mod Manager instead,
Click Export to Mod, Fill in the required fields and then Export.

To upscale the resolution wraps are baked to;

Open frosty and go to Vehicles/Player
In there you will find folders named after the cars from the game.

Find the folder of the car you want to upscale the wraps for.
(I'm using the Maybach)

Inside the folder you will have a bunch of files,
You will have to find the one that's a RaceVehicleBlueprint

After you find the file search for Livery in the search box and expand the results until you find LiverySettings
there you'll see BakedTextureWidth and BakedTextureHeight
As you can see, both are set to 2048.

To upscale the wrap you just have to increase the values.
Set the values to 4096 for 4k, or 8192 for 8k, you can even go higher but there's no point.

That's it.

Video version:

Text version:
Open Frosty Mod Manager.
Create a NFS Unbound profile if one hasn't been added automatically the same way you add a profile in Frosty Editor.
Close the Update SDK prompt aswell if you want to.
Click Add Mod(s)
Add the mod you exported earlier.
Press Apply Mod(s).
Press Launch Game.

will add new screenshots of my own later

Yu-Gi-Oh 180SX