Palette rotation

Palette rotation is a non-NeoGeo-specific video effect produced by rotating (shifting in a loop) a range of color entries inside a palette.

Like the auto animation feature, this effect was frequently used for cyclic animations (waterfalls, neon signs...) without having to use multiple tiles, saving up graphics memory and VRAM access time.

Example code
The easiest way is to simply cycle through a table of pre-baked palettes. It can also be done procedurally, for example: