In Redshift you can create proxies (archives) and then make the instancefile attributes on points in the scene. However by enabling "Override 'instancefile' Proxy Materials From Scene Materials" for the points to be instances you can override the materials within the proxies. So if I give those points attributes (lets say a blend attrib, from 0-1) I can then import that userdata in the redshift material and make a blend between 2 colors. This way you could make nearly a complete forest with just 1 version of a tree, by just randomizing the shader based on the points completely.

Is there anyway to do the same thing in USD/karma instead of having to make variants?

Yes, this is one of the benefits of USD instances. Use a primvar on the instances to override the material settings. On the material, include a primvar reader to read the value.

Ah perfect, that worked like a charm! This isn't supported by XPU yet I guess?

Klonkel
This isn't supported by XPU yet I guess?

Hmm, yes I think not for point instancers. It should work for references that are instances though.