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LTO functionality was added in IDE 1.6.10 to provide smaller sizes and faster code (and apparently build times). See issue #446
Will also work with ide 1.0.x as long as you have avr-gcc toolchain > 4.8 (e.g. debian/ubuntu)
On a nano328 for example:
Blink without LTO patch (HEAD):
Blink with LTO patch:
This is only relevant to AVR.