I am trying to create a horse. I sculpted a high poly version, created a remeshed version with applied shrinkwrap modifier. Now I should bake the normals, but the baked normals have sharp edges even though I have smooth shading enabled. What causes the problem?
For baking, set Cage Extrusion to
0.05 m and Max Ray Distance to
0 m (unlimited). This reduces the glitches/artefacts.
For the shader, set Color Space of the Image Texture node to
Non Color. Increase the Strength value of the Normal Map node to
1.0 if you like. It was 0.5 in your blend file.
(The Metallic in the screenshot is just to highlight the details.)