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VP8
Encoding Quality
With the defaults, vpxenc will create low quality encodes, its bitrate is too low. It will have to be bumped up to get some good quality.
When using ffmpeg, pass -b 0
(bitrate 0) so that it doesn't limit bitrate. Also use a CRF. For very high quality encodes, I'd say around 6 to 8.
ffmpeg -i video.y4m -vcodec libvpx -crf 6 -b:v 0 -y video.mkv