"It is extremely similar to some early birds such as Archaeopteryx", said paleontologist Xing Xu of the Chinese Academy of Sciences, referring to the earliest-known bird, which lived 150 million years ago.
A almost perfectly preserved fossil was found in the Hebei region of northeastern China.
Researchers looked at 66 places on the fossil under a microscope to see if they could find remnants of melanosome shapes. The impressions preserved the shape of the melanosomes.
The vibrantly coloured feathers are believed to be over the head, neck and chest. Dongyu Hu, a professor in the College of Paleontology at the Shenyang Normal University, led the study.
The team saw microscopic structures in the exquisitely preserved fossil that indicated the presence of the bright plumage.
While examining the feathers under a powerful microscope, researchers found that for the most part, the pigment that was once present was long gone.
Found in Hebei Province, the dinosaur discovery "suggests a more colorful Jurassic World than we previously imagined", according to evolutionary biologist Chad Eliason of the Field Museum in Chicago, one of the researchers in the study. "The pigment in the feathers is black, but the shapes of the melanosomes that produce that pigment are what make the colors in hummingbird feathers that we see", said Eliason. The colored feathers ran through Caihong's body neck, and crest and the large crested head closely resembled that of Velociraptors. Caihong, however, couldn't fly - its feathers were probably used to attract mates and keep warm.
The skull of Caihong is similar to that of Velociraptor, but it also has a bony crest in the middle of its head.
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It had crests above its eyes that looked like bony eyebrows.
Many dinosaurs possessed feathers.
Caihong is part of a group of small, bird-like dinosaurs that lived in China during the Jurassic, Xu said, but it stands out even among its closest relatives.
In addition to being the oldest example of a species with rainbow feathers, the newly discovered dinosaur is the earliest known animal with asymmetrical feathers, a feature that allows modern birds to steer or turn while flying. "This suggests that controlling [flight] might have been first evolved with tail feathers during some kind of aerial locomotion".
"The tail feathers are asymmetrical, but the wing feathers aren't, a freaky feature previously unknown among dinosaurs and birds", said Xing Xu from the Chinese Academy of Science, a co-author of the study. "Its forelimbs were configured like wings".
'To be honest, I am not sure what function the feathers have, and I don't think that you can completely exclude the possibility that the feathers helped the animal to get in the air'. "The preservation of this dinosaur is incredible, [and] we were really excited when we realized the level of detail we were able to see on the feathers". "This combination of traits is rather unusual", said study co-author Julia Clarke of the University of Texas at Austin, in the statement.
The creature has been named Caihong juji, meaning "rainbow with the big crest" in Mandarin.