Blueprint mesh and material blender actor

Hi, I was wondering how to achieve the effect of a spawner BP actor that can blend a selected mesh and also the material with the environment like they do it in Hellblade Hellblade Development Diary 8: Prototyping Phase - YouTube

I would start from using the node called “DistanceToNearestSurface” in material editor. You have to enable “Generate Mesh Distance Fields” in your project settings and adjust manually quality of the distance fields for your meshes.