I thought I should chime in as I have just answered a thread (Light colored text with alpha = aliasing artifacts? - #10 by Evgeni_Popov) that had the same problem than the original question of this thread:
If you want a really good blending, you should generate the dynamic texture as a pre-multiplied alpha texture (by calling textureGround.update(true, true)) and override the OpenGL blending factors (you also need to set materialGround.useAlphaFromDiffuseTexture = true; as you are setting the dynamic texture to the diffuse slot):
https://playground.babylonjs.com/#5ZCGRM#980
Old code:
New code:
