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PSD

PSDs are files that are created and saved in Adobe Photoshop, the most popular graphics editing software ever. This type of file contains layers that make modifying the image much easier to handle. This is also the program that generates the raster file types mentioned above. The largest disadvantage to PSDs is that Photoshop works with raster images as opposed to vector images.

DNG

Digital Negative (DNG) is a raw image file format for digital photography that's open-source, royalty-free, and highly compatible. It was developed by Adobe to address the lack of an open standard for raw files from different cameras and editing software. DNG files are supported by many software manufacturers, including Apple and Google, and camera manufacturers, including Leica, Casio, Ricoh, Samsung, and Pentax. Editing: DNG files are easier to edit because changes are written directly into the file. Non-destructive editing allows you to revert to the original image data at any time. Size: DNG files are typically 15–20% smaller than RAW files. Storage: DNG files can be compressed, making them ideal for storage and archives. Future compatibility: DNG files are more likely to be openable in the future. DNG files can also be used to store metadata, such as shooting parameters, copyright, and star ratings.