So there is a feature in Unity that supports importing PSB files as 2d characters:
https://docs.unity3d.com/Packages/com.unity.2d.psdimporter@1.2/manual/index.html
(even though it only work with PSB, for some reason it's called PSD importer)
So I made a simple stick man in Krita to use for my new game, and then I noticed that Krita doesn't let me export as PSB! Not only that, even GIMP doesn't support PSB!
I don't have Photoshop, so is there a way to convert the PSD that I have to PSB without Photoshop?
Found out that you can just rename the .PSD file to .PSB and it will work! Awesome!
Source: https://forum.unity.com/threads/psd-importer.591532/#post-4163995